medium · Private Credit market-sourcing-sponsor-dynamics
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
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