easy · Debt Capital Markets credit-ratings-risk
In the context of the Restricted Payments covenant, what is a 'Permitted Investment'?
- An investment in a high-risk hedge fund using the company's pension assets.
- An outflow of cash to a subsidiary or joint venture that is specifically allowed and does not count against the builder basket.
- A requirement that the company only buys U.S. Treasury bonds with its excess cash.
- Any acquisition of a competitor that is funded entirely with new equity from the sponsor.
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