Of course we shareholders would rather finance through debt than equity and many of us would prefer to finance through partnership than debt. However, the fact that they have not been able to get this done tells us the credit market is not excited about lending to a company based on collateral alone (mnkd has no revenue). I guess lenders are sitting on enough foreclosed property right now. That is why i propose the 2 traunch structure because only the subordinate portion would have a conversion feature and the senior portion has a no-brainer level of coverage.