The Deal Room: Private Equity's Unique Subway Sandwich!
Market Maker
00:00
JP Morgan's 5 Billion Dollar Financing Package for Subway
The risk is certainly spread and a contract length is quite visible, so there's visibility of income. What you're essentially doing is packaging millions of subway customers into 37,000 consistent revenue streams. As a bank, I would feel so much more confident lending against the 2.5 million buyers of a subway sandwich every lunch. So it's just a different risk profile. And it mirrors a little bit of the mortgage-backed securities, kind of combinations that we saw back in the dark days, pretty thousand-and-a-half.
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