medium · Private Credit portfolio-management-monitoring-workouts
A middle-market company, Apex Manufacturing, is acquired at an Enterprise Value (EV) of 11.0 × its reported EBITDA of $40M. The capital stack consists of a $20M first-out Revolving Credit Facility, a $140M First Lien Term Loan, a $40M Second Lien Term Loan, and $20M of Mezzanine debt, with the remainder as Sponsor Equity.
If the company undergoes a distressed liquidation yielding only $150M in total asset value, what is the recovery percentage for the First Lien Term Loan holders?
- 92.9%
- 85.7%
- 100.0%
- 0.0%
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