medium · Private Credit documentation-covenants-terms
A borrower fails a quarterly leverage test and invokes its 'equity cure' right. The leverage covenant is 4.5x and the company's EBITDA is $20M, meaning debt must not exceed $90M.
If the company currently has $100M in debt, what is the minimum equity injection required to restore compliance?
- $45M
- $5M
- $10M
- $20M
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