hard · Private Credit & Debt
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
Sign up free to see the explanation and track your rank →
More Private Credit & Debt practice
- What is the fund's TVPI (Total Value to Paid-In) multiple?
- If the current SOFR rate drops to 0.25%, what is the all-in interest rate the borrower mus
- What is the Dividend Coverage ratio?
- What is the blended interest rate paid by the borrower?
- What is its current Debt-to-Equity (Leverage) ratio?
- A borrower's credit agreement includes a 'Negative Pledge'.… — Is this allowed?
- A BDC (Business Development Company) is required to distribu… — What is the primary benefi
- An investor is reviewing a fund's performance and sees a DPI… — What does this suggest abo