easy · Debt Capital Markets primary-issuance-syndication

What is the primary economic function of a bridge loan in a corporate acquisition?

1. To provide equity capital that lowers the overall leverage embedded in the leveraged buyout structure.
2. To serve as a long-dated, very low-cost debt instrument that stays permanently in the capital structure for over ten years.
3. To provide temporary, interim funding that ensures a transaction can close before permanent financing is secured.
4. To eliminate the need for any investment bank to underwrite the issuer's final long-term takeout bond issuance.

Sign up free to see the explanation and track your rank →