easy · Debt Capital Markets primary-issuance-syndication
In an 'Underwritten LBO Bridge', the bank provides a short-term loan to ensure an acquisition can close, intending to replace it with bonds later. If the bond market 'shuts down', the bank:
- Can compel the company to hand the acquired assets back and unwind the entire merger.
- Is 'stuck' with the bridge loan on its balance sheet (a 'hung bridge') and must hold it long-term.
- Simply hands the loan exposure over to a rival bank to warehouse and manage at no cost whatsoever to itself.
- Is contractually permitted to double the loan's interest rate every single day until the bonds finally clear.
Sign up free to see the explanation and track your rank →
More Debt Capital Markets primary-issuance-syndication practice
- What is a 'bridge loan'?
- What is the 'winner's curse' in the context of bond auctions (a concept related to market
- The 'new-issue concession' refers to:
- Which component of the 'Gross Spread' (underwriting fee) usually rewards the specific bank
- If a company has multiple bond issues outstanding, each with its own builder basket, which
- If a company buys a machine on January 1, by what date must it typically incur the debt an
- In the context of a syndicated loan, what is the function of the 'price flex' clause durin
- What is the primary objective of TLAC (Total Loss-Absorbing Capacity) and MREL (Minimum Re