medium · Corporate Credit Analysis covenants
A borrower has a 4.5x total leverage incurrence test. Current debt is $900 million. LTM EBITDA is $250 million. The company acquires a competitor for $300 million, funded with 50% debt and 50% equity. The target has $40 million EBITDA.
What is the pro-forma leverage?
- 4.14x
- 3.10x
- 3.62x
- 4.20x
Sign up free to see the explanation and track your rank →
More Corporate Credit Analysis covenants practice
- A credit agreement requires a borrower to maintain a Net Lev… — What type of covenant is t
- Ironclad Corp has a credit agreement that requires the firm… — This is an example of what
- In a well-known creditor-on-creditor move, a company transfers its valuable trademarks and
- Serta Simmons Bedding executed a transaction where 65% of it… — What is this tactic called
- What is the primary implication for creditors of the parent company?
- If the company utilizes the full basket to fund an acquisition, what is the minimum EBITDA
- What is the total capacity in the basket for a dividend payment?
- If the company pays a $40M dividend at the end of Year 1, what is the remaining basket cap