hard · Private Credit & Debt
A sponsor-backed company has a maintenance leverage covenant set at 5.50×. At the end of Q3, the company has Net Debt of $240M and LTM EBITDA of $40M. The credit agreement contains a standard equity cure provision.
What is the minimum equity injection required to restore covenant compliance?
- $10M
- $40M
- $20M
- $3.6M
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