medium · Debt Capital Markets credit-ratings-risk
A credit agreement allows for $25 million of 'M&A integration expenses' to be added back to EBITDA.
If reported EBITDA is $150 million and debt is $700 million, and the maintenance test is 4.25x, what is the headroom in 'turns' of leverage?
- 0.58x
- No headroom, the company is in breach.
- 0.25x
- 0.42x
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