A pari plus double dip is different than the traditional double dip in the sense that the new money loans are getting guarantees from non-guarantor subsidiaries. Rather than getting a pari passu claim as the existing debt, guarantees issued from non-guarantor subsidiaries are first in line to the assets residing at the non-guarantor subsidiaries.
A great example of this is the September 2023 LME implemented by Trinseo. The borrower Trinseo Luxco Finance SPV received $1.077B in new money loan, which was split into a $948MM intercompany loan to the restricted credit group and another $129MM intercompany loan to Trinseo Luxco Sarl. The main point of structuring the $125MM ($4MM fees) as an equity contribution to the credit group is to boost the restricted payment basket so that the Company can drop down the asset Americas Styrenics LLC (valued at roughly $377-500MM) into the unrestricted subsidiaries as indicated below. The new money lender then received guarantees from these unrestricted subsidiaries, making them first in line for the asset (the “plus” part of pari plus).
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