medium · Debt Capital Markets
A Ba2/BB-rated issuer has a senior secured leverage covenant of 3.5x. Actual senior secured debt is $600 million and EBITDA is $200 million.
If the covenant steps down to 3.25x and the company simultaneously draws 40 million on its revolver, what is the new headroom?
- 0.30x
- 0.25x
- 0.10x
- 0.05x
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