medium · Private Credit documentation-covenants-terms
A company has $40 million in EBITDA. OpCo has $160 million in senior debt (4.0x leverage). HoldCo issues a $40 million PIK note.
If the credit agreement defines a 'Maintenance Covenant' at 5.5x total leverage, what is the initial 'headroom' in EBITDA terms before a breach occurs?
- 3.6 million
- 10.0 million
- 22.0 million
- 1.5x
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