medium · Debt Capital Markets credit-ratings-risk
A borrower’s total leverage covenant steps down from 6.0x to 5.5x. The company has $300 million of debt and $60 million of EBITDA. They expect to realize $5 million of EBITDA add-backs which are capped at 10% of total EBITDA.
What is their headroom against the 5.5x covenant?
- 0.96x
- 0.50x
- 0.83x
- 0.88x
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