medium · Private Credit & Debt loan-structures-instruments
An LBO is structured with a $100 million First Lien Term Loan at SOFR + 500 bps and a $40 million Second Lien Term Loan at SOFR + 900 bps.
If SOFR is 4.50%, but the credit agreement includes a SOFR floor of 5.00% for both tranches, what is the blended interest rate for the total debt package?
- 10.64%
- 11.14%
- 11.64%
- 12.00%
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