medium · Private Credit & Debt documentation-covenants-terms
A private debt fund originates a term loan to a middle-market healthcare company with the following terms: SOFR + 600 bps, a 1.00% SOFR floor, and a 2% original issue discount (OID).
If the expected life of the loan is 4 years and SOFR is currently 5.0%, what is the approximate all-in yield to the lender?
- 11.50%
- 11.25%
- 12.00%
- 11.00%
Sign up free to see the explanation and track your rank →
More Private Credit & Debt documentation-covenants-terms practice
- If the current SOFR rate drops to 0.25%, what is the all-in interest rate the borrower mus
- A borrower's credit agreement includes a 'Negative Pledge'.… — Is this allowed?
- A loan is priced at SOFR + 600 bps with a 1.0% floor. If the current SOFR rate is 0.5%, wh
- If Term SOFR is currently 0.75% and the loan was issued with a 2.0% Original Issue Discoun
- What is the company's 'covenant headroom' in EBITDA terms?
- Is the company in default?
- A loan agreement specifies that the borrower's Total Leverag… — How should this covenant b
- What is the immediate consequence for the CLO Equity holders?