medium · Corporate Credit Analysis
DeltaCo has $300M of debt and $48M of LTM EBITDA. Its bank loan has a maximum leverage maintenance covenant of 6.00x. The company suffers an earnings hit, and EBITDA falls to $44M. The private equity sponsor contributes a $5M equity cure.
What is the resulting covenant EBITDA for testing purposes?
- $44M
- $44.8M
- $53M
- $49M
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