market-sourcing-sponsor-dynamics — Private Credit & Debt Practice Questions

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1. What is the sponsor's Money Multiple (MOIC) on their initial equity investment?
2. Using the simplified rule IRR ≈ Multiple^1/n - 1, what is the required Money Multiple (MOIC) to achieve this?
3. What is the implied 'Equity Multiple' of the entry capital structure?
4. Which structure should they prefer?
5. If US short-term rates are 5.0% and Euro short-term rates are 3.5%, what is the approximate hedged USD return
6. A PE sponsor is acquiring a company with $50M of LTM EBITDA. They secure a debt package with a 4.5× total leve
7. If they raise an additional $90 million in debt to pay a dividend, what is the new Interest Coverage Ratio (IC
8. After accounting for a 0.8% difference in credit losses, what is the estimated 'Illiquidity Premium' being ear
9. What is the minimum equity injection required to restore covenant compliance?
10. What is the fund's Distributed to Paid-In (DPI) multiple?
11. An MLA (Mandated Lead Arranger) at a global bank is organizing a 750M loan for a large-cap software company. T
12. In a private equity exit, what does 'Tag-along' right provide to a minority shareholder?
13. Which of the following would be found in the 'Uses' side of a Sources and Uses table for a Leveraged Buyout (L
14. What is a defining repayment characteristic of a TLA?
15. The 'Illiquidity Premium' in private debt refers to which of the following?
16. How does 'Multiple Expansion' contribute to returns in a leveraged buyout (LBO)?
17. A sponsor-backed company pays its PE parent a 'Management Mo… — Why do lenders often see this as a valid EBITD
18. What is the increase in total leverage?