hard · Corporate Credit Analysis covenants
NorthStar Industries is subject to a maximum total leverage covenant of 5.5x. Currently, the company has $1.1B in debt and $200M in EBITDA. The covenant allows for a 'Free and Clear' incremental debt basket of $200M.
If the company utilizes the full basket to fund an acquisition, what is the minimum EBITDA the acquired company must contribute to remain in compliance pro-forma?
- $50M
- $20M
- $36.36M
- $15M
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