medium · Investment Banking
An LBO is structured with $500.0M of Debt. $250.0M is Bank Debt (7 % interest) and $250.0M is Subordinated Notes (10 % interest).
If the company has $50.0M of LFCF after interest, which tranche is repaid first?
- Bank Debt
- They are repaid pro-rata
- Neither, the cash is kept on the balance sheet
- Subordinated Notes
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