Platform Updates: August 2024

1 - Enhanced Deal Structuring with Expanded Financing Capabilities

1a: Unlock Complete Flexibility with Unlimited Debt Tranches

We’re thrilled to unveil one of our most highly anticipated updates - expanded financing capabilities that give you full control over your debt, pref and common equity structure.

With this powerful set of features, you can now configure unlimited tranches of debt and preferred equity, including revolvers, term debt, bonds, and even custom debt types, with common security features configurable by tranche (e.g., cash-pay vs. PIK, prepayability, mandatory amortization, etc.) - with configurable seniority and a debt and equity waterfall at exit that respects seniority and accrued PIK value over the investment hold period. 

1b: Greater Transparency with New Pricing Metrics

As you build your capital structure, the Sources & Uses now dynamically populates the pricing for each tranche of debt and displays a weighted average cost of debt (“WACD”). This provides immediate clarity on your debt composition, enabling you to assess financing costs seamlessly and ensure your transactions are structured optimally.

1c: Reflect Market Constraints with Minimum Equity Thresholds

We’ve now released the ability to set a minimum equity threshold (e.g., total equity must be >30% of the total capital structure), ensuring your financing package stays within practical limitations. This is particularly relevant when reviewing an Analysis at Various Prices (“AVP”) that sensitizes TEV down while holding debt constant. In such a scenario, Mosaic will now reduce your assumed debt load to comply with the minimum equity constraint. 

2 - Transform Deal Incentive Structures with Expanded MIP Options

Building on input from investment professionals in the Mosaic network, we’re excited to introduce significant enhancements to our Management Incentive Plan (“MIP”) functionality. With the latest update, you now have the flexibility to model MIP in three distinct ways: (i) as an options pool that dilutes the sponsoring shareholders, (ii) as a simple percentage of the gain on the common equity from the deal, or (iii) as “sweet equity” - the preferred tax-advantaged method for UK and European deals. Sweet equity adds significant complexity to a standard LBO analysis yet is often modeled even in the early stages in UK-based and European deals. We hope this addition will be extremely helpful to those tasked with this kind of analysis with high frequency.

3 - Tailor Your Analysis with Enhanced AVP Configurability

Our latest AVP update takes customization to the next level, allowing you to tailor your models by displaying or hiding metrics that matter most to your analysis. For example, if revenue multiples aren’t relevant to your industry team’s focus, you can easily hide them to keep your view clean and focused on the key drivers that are important to your deal.

To further enhance your workflow, you can now save these customized views as part of your default settings, ensuring consistency and efficiency across all of your models.

4 - View Detailed Exit Waterfall Insights on Our New Exit Tab

Our latest release introduces a game-changing Exit tab that offers comprehensive visibility into recovery scenarios. It’s designed to factor in debt and pref equity seniority across tranches, ensuring you get a precise understanding of recoverability at each exit stage. Plus, the expanded MIP analysis reveals how management incentive plans affect outcomes, giving you the clarity needed to drive smarter decisions and optimize deal returns.

5 - Delve into Detailed Returns Analysis with Our New Returns Tab

We’re excited to introduce the highly anticipated Returns tab - where now you can evaluate returns by security and investor type, whether it’s the management team, a co-investor, or other stakeholders. This is especially valuable for investors evaluating opportunities across the capital stack or those interested in understanding the returns impact across securities (e.g., Bond vs. Pref vs. Common Equity). 

6 - Get a Comprehensive Credit View with Our New Leverage Tab

Mosaic’s dashboard now comes equipped with a new, detailed Leverage tab, offering a more comprehensive view on the deal’s credit metrics over the investment horizon. The view below provides full visibility into the debt schedules by tranche, showing the detailed build-up of each. 

Finally, we have expanded Mosaic’s credit metrics to include Interest Coverage Ratio (“ICR”), Fixed Charge Coverage Ratio (“FCCR”), and Debt Service Coverage Ratio (“DSCR”), with transparency into their calculation - just hover over the label to learn how each is computed. 

Let us know what you think 📣

Mosaic has been built over the years by the collective intelligence of the private equity industry - specifically, by you, our users - through your thoughtful product feedback.

Your feedback is instrumental in helping us build a product that you'll continue to love far into the future. Please reach out if there is anything we can do to make your Mosaic experience even better.

That's all for now! Shoot us a note at support@mosaic.pe if you can think of anything else you'd like to see in Mosaic!