easy · Corporate Credit Analysis cap-structure

How does an 'Asset-Based Loan' (ABL) typically determine the amount a borrower can draw?

  1. Based on the amount of common equity the sponsor has contributed at closing.
  2. By calculating the firm's total enterprise value using a forward-looking blended EBITDA multiple.
  3. Through a 'borrowing base' formula linked to eligible accounts receivable and inventory.
  4. By simply checking the borrower's most recent credit rating issued by S&P or Moody's.

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