medium · Debt Capital Markets credit-ratings-risk
A company has $500 million of debt and $100 million of EBITDA. The leverage covenant steps down from 6.0x to 5.5x.
If the company executes a $50 million debt-funded share buyback, what is the new cushion?
- 1.00x
- 0.50x
- 0.00x
- Negative 0.50x (Breach)
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