Aerospace & Defense Deals: Mezzanine Debt & Capital Stack Done Right
When the deal is aerospace and defense and the question is Mezzanine Debt & Capital Stack, the structure decisions in the first 30 days outlast the next five years. This is where Jason Powell works.
Mezzanine Debt & Capital Stack on aerospace and defense deals is one of those workstreams that looks routine on a checklist and decides outcomes in practice.
The typical aerospace and defense platform sits at $15M to $200M EV with EBITDA in the $3M to $30M range. The thesis runs on tier-two or tier-three supplier consolidation with certifications as moat. Foreign LP capital can trigger CFIUS review on the cleanest of deals. Map the cap table early.
How Mezzanine Debt & Capital Stack actually gets structured.
Target senior leverage at 3.0x to 3.5x EBITDA, mezzanine at 1.0x to 1.5x on top.
Negotiate an intercreditor agreement that does not throttle the operator.
Structure mezzanine with PIK toggle and warrants priced into the IRR model.
Confirm covenant headroom of at least 20 percent at close.
In aerospace and defense, layer in ITAR / EAR registration transferred or refiled before close as part of the Mezzanine Debt & Capital Stack workstream.
Letting the lender pick the intercreditor terms. Those terms decide what the operator can do on day 180.
"The capital stack is a contract, not a spreadsheet. Read every page of every term sheet."Jason Powell · Mezzanine Debt & Capital Stack
The deal is one thing. The capital that opens up after close is another.
Most independent sponsors solve the closing capital and then run into the post-close capital problem alone. The capital markets relationships that matter at month 18 are part of this practice.
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Bring the aerospace and defense deal. Get Mezzanine Debt & Capital Stack done right.
Direct counsel from a securities and M&A attorney with billions in structured transactions, the independent-sponsor-native playbook, and the capital markets network that opens up post-close.