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Copter

For the same reason that a large company can borrow money at a lower cost from a syndicate than from one source.

Spreading risk reduces whisker twitching.

You are right debt is debt. However there is a world of difference between long dated debt ( your mortgage) and debt with a short repayment date ( your credit card debt)

Let us assume that after a 15% reduction in new case take up and seeing NIHL through to 90% reduction in involvement in NIHL case processing that a material hole is made in the debt mountain. Let us assume that SGH has then an ongoing capability to spit out $200M EBITDA and $75m debt paydown then it would be clear that SGH can afford chunky debt. ...and affordable debt sure as heck helps avoid dilution.....AND acts as a poison pill.

Mezzanine Finance is quasi debt ( equity bonus)
High Yield Corporate Bond is indeed debt but if you could get a 7 year maturity date its better than dancing to syndicate tune
Convertible High Yield shares - dilution but pushed down the line to the conversion date
My suggestion of a short dated small retail issue followed by a longer dated placing = 2 step dilution in future.

So you are right and wrong. Its all in the whisker twitching. Longer dated affordable debt is just fine. Spreading debt risks beyond the syndicate is likely to make syndicate lenders smiley.

mel