documentation-covenants-terms — Private Credit & Debt Practice Questions

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  1. If the current SOFR rate drops to 0.25%, what is the all-in interest rate the borrower must pay?
  2. A borrower's credit agreement includes a 'Negative Pledge'.… — Is this allowed?
  3. A loan is priced at SOFR + 600 bps with a 1.0% floor. If the current SOFR rate is 0.5%, what is the total inte
  4. If Term SOFR is currently 0.75% and the loan was issued with a 2.0% Original Issue Discount (OID) over a 5-yea
  5. What is the company's 'covenant headroom' in EBITDA terms?
  6. Is the company in default?
  7. A loan agreement specifies that the borrower's Total Leverag… — How should this covenant be classified?
  8. What is the immediate consequence for the CLO Equity holders?
  9. If the company subsequently raises a 'down round' at $6.00 per share, what is the fund's new conversion price?
  10. If the equity tranche is $50M (10% of capital), what is the 'Cash-on-Cash' yield before defaults?
  11. If current SOFR is 0.50%, what is the total coupon rate?
  12. What is the likely impact on the loan's fair value?
  13. If SOFR is currently 0.50%, what is the all-in interest rate paid by the borrower?
  14. If the company currently has $100M in debt, what is the minimum equity injection required to restore complianc
  15. If the expected life of the loan is 4 years and SOFR is currently 5.0%, what is the approximate all-in yield t
  16. If the net debt is $272 million, how much 'headroom' does the company have on its leverage covenant expressed
  17. If the current 3-month Term SOFR is 0.65%, what is the all-in coupon rate paid by the borrower?
  18. If the current SOFR rate is 0.50%, what is the all-in interest rate paid by the borrower?
  19. If the current market SOFR rate is 0.25%, what is the all-in interest rate?
  20. What is the minimum equity cure amount the sponsor must inject to restore compliance with the leverage covenan
  21. How much cash does the borrower actually receive at closing from this tranche?
  22. If the company issues a new incremental 'accordion' facility at a spread of 600 bps, and the original facility
  23. What is the Covenant EBITDA?
  24. If SOFR resets to 0.50% and the loan is priced at 98.00 (OID), what is the current effective coupon rate?
  25. What is the estimated annual cash-on-cash yield to equity (assuming no defaults)?
  26. If the borrower draws20M while SOFR is 4.5%, what is the total annual cost of the facility in dollars?
  27. In a 'Maintenance' vs 'Incurrence' covenant comparison, which of the following is true of Incurrence covenants
  28. If the current SOFR rate is 0.50% and the loan is marked at 98.0 (fair value), what is the current yield?
  29. If SOFR rises to 6.00%, what is the borrower's effective interest rate?
  30. If the unrated equity tranche is $50M, and the pool suffers a 2% annual default rate with 65% recovery, what i

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