medium · Private Credit & Debt loan-structures-instruments
If a Credit Agreement permits incremental debt up to 4.5 × Senior Secured Net Leverage, and the borrower is currently at 4.8 ×, how can they incur additional debt for an acquisition?
- By utilizing an available 'fixed' or 'Freebie' basket
- By meeting the incurrence test on a 'no-worse-than' basis
- Debt can only be incurred if the target is deleveraging
- They must refinance the entire facility
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