medium · Private Credit & Debt documentation-covenants-terms
A private debt fund is 1.0× levered (Debt/Equity). It earns SOFR + 600 bps with a 1.00% SOFR floor on its assets, while paying SOFR + 250 bps (no floor) on its fund-level debt.
If SOFR falls to 0.25%, what is the fund's gross interest margin on equity?
- 11.25%
- 9.50%
- 12.00%
- 10.25%
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