I see way more profit potential in the equity than the debt. So why would anyone sell the equity to buy the debt?(as I think Ark suggested Manulife may have).
It's not a right or wrong scenario. Let's not forget the cost of capital. Unlike retail investors, the institutional investor can access money at zero cost. Money is free today.
Where Mint is at today, in the early build out stage, it has great uncertainty because it's heavily leveraged with little asset. Clearly, the last couple of years shows us that the debt holders are the winners. The equation starts to change when Mint starts posting positive EBITDA or EPS. At that point the leverage will start to swing towards equities, as Mint starts to build it's asset base. We shall all see soon enough.