hard · Debt Capital Markets
A Senior Note portability threshold is 5.25x. Pro-forma for a sale, Debt is $2,100 million and EBITDA is $400 million. The issuer has $100 million of unrestricted cash and $50 million of restricted cash.
Is the 101% put triggered?
- No, because net leverage is 5.00x (using unrestricted cash).
- Yes, because gross leverage is 5.25x and indentures rarely allow cash netting for Change of Control.
- Yes, because any leverage above 5.0x is considered 'Highly Leveraged' and triggers the CoC put automatically.
- No, because net leverage is 4.88x (using all cash).
Sign up free to see the explanation and track your rank →
More Debt Capital Markets practice
- In the context of Debt Capital Markets, what is a leverage-based margin ratchet?
- Which officer of a borrower is typically responsible for signing the compliance certificat
- Why is the Administrative Agent's role important for the margin ratchet?
- If a company has a leverage-based pricing grid and SOFR rises significantly while leverage
- What is meant by the 'bond floor' in the context of yield analysis?
- For a bond trading at a discount (below par), which yield measure is typically the same as
- What is a 'call schedule' for a corporate bond?
- If a bond's Yield to Worst is equal to its Yield to Maturity, what can we likely conclude