In a dividend recapitalization, which tranches typically get added, and what is the impact on the capital structure?

A dividend recap layers on incremental debt to fund a distribution to the sponsor/equity, without an operating change. It's usually done by upsizing the existing TLB / issuing an incremental term loan, adding a second lien, or issuing HoldCo PIK notes — the PIK/HoldCo route is common because it avoids burdening OpCo cash flow and keeps senior secured capacity intact. Impact: total leverage rises, equity cushion shrinks, coverage tightens, and the sponsor de-risks by pulling cash out early — which is why credit investors and rating agencies view aggressive recaps (especially HoldCo PIK-funded) as credit-negative.