Cash Sweep

Investment Banking Glossary

Provision in an LBO credit agreement requiring the borrower to apply a defined percentage of excess cash flow to mandatory debt prepayment. Sits at the bottom of the LBO cash flow waterfall: interest rightarrow mandatory amortization rightarrow capex rightarrow NWC rightarrow taxes rightarrow minimum cash reserve rightarrow optional prepayment (the sweep). Sweep percentages typically step down as leverage declines (e.g., 75% sweep above 5.0× Total Debt/EBITDA, 50% between 4.0-5.0×, 0% below 4.0×).

Sign up free — get all 136 Investment Banking terms, flashcards & rank tracking →

More Investment Banking terms

KomFi: Test Prep Made Easy

KomFi: Test Prep Made Easy — free adaptive practice for GMAT, GRE, SAT, ACT, National Real Estate Exam, Investment Banking, and finance with full explanations.

KomFi Academy is free GMAT prep and personalized GMAT help built as a training platform: 89,613+ practice questions, 30,000+ flashcards, on-demand video lectures, podcasts, and 4K slide decks. Flagship tracks: Free GMAT Prep, Free GMAT Resources, National Real Estate Exam Prep, Investment Banking Prep, Finance Prep, GRE, SAT, ACT, LSAT, MCAT, Financial Accounting, Private Equity, Private Credit, and Quantitative Finance.

Free GMAT Prep & Personalized GMAT Help

What's inside

Topics

View pricing · Read testimonials