hard · Private Credit & Debt loan-structures-instruments
A manager of a $200m private credit fund with 1.0× fund-level leverage (SOFR + 400 bps cost) is evaluating a senior secured loan. The loan yields 8% net to the fund before financing.
If the fund is fully levered, what is the doubling of the equity return assuming SOFR = 4.5%?
- 12.0%
- 14.0%
- 16.0%
- 7.5%
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