medium · Corporate Credit Analysis
An arranger has 'Reverse Flexed' a deal by increasing the price to par (100). This means that for a $400 million loan, the borrower:
- Receives $396 million but only has to pay back $396 million at maturity
- Must pay an additional 1.0% fee to the arranger for the successful outcome
- Receives $404 million at closing due to the price improvement
- Receives the full $400 million at closing and has no OID amortization expense
Sign up free to see the explanation and track your rank →
More Corporate Credit Analysis practice
- Apex Manufacturing has a total exposure at default (EAD) of… — What is the annual expected
- What is the company's Funds From Operations (FFO)?
- Which statement best reflects the credit risk synthesis?
- A credit agreement requires a borrower to maintain a Net Lev… — What type of covenant is t
- Using the Merton structural model intuition, if a company's equity volatility (sigma_V) in
- What is its CET1 ratio?
- If EBITDA is $150M, what is the entry leverage multiple?
- What is its EBITDA/Interest coverage ratio?