underwriting-credit-analysis — Private Credit Practice Questions
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- If the investor hedges the currency risk using forward contracts, what is the approximate expected USD return?
- A lender is determining the maximum debt capacity for an LBO… — What is the maximum supportable debt based on
- What is the Enterprise Value?
- If the sponsor uses $360 million in total debt, what is the entry Net Debt / EBITDA leverage multiple?
- A credit agreement includes a 75% 'Excess Cash Flow Sweep'.… — How much of this cash must be used to prepay th
- If the fund provides a $200M senior loan, how does the inclusion of add-backs affect the reported leverage rat
- If the pool suffers a 2% annual default rate with a 65% recovery rate, what is the adjusted annual yield on th
- If the cumulative probability of default over a 5-year investment horizon is 8%, what is the difference betwee
- If EBITDA grows 8% annually and all free cash flow is used to pay down debt, what is the estimated cumulative
- What is the Fixed Charge Coverage Ratio (FCCR)?
- If the senior debt is a 6-year term loan amortizing equally each year at an all-in rate of 6%, what is the max
- If the lender's 'Incurrence' covenant for acquisitions is 4.0× and the 'Maintenance' covenant is 5.0×, can the
- If the agreement treats the cure as a reduction in debt, what is the new leverage ratio?
- If the total debt is $300 million, what is the 'Adjusted Leverage' as viewed by a conservative direct lender w
- What is the risk-neutral probability of default (PD)?
- How much must the borrower apply to prepay the outstanding senior debt?
- If the total debt is $250M, what is the leverage ratio for covenant compliance purposes, and how does it compa
- If the interest rate is $8% and EBITDA remains flat, what is the impact on 'Interest Coverage' (EBITDA / Inter
- What is the Distributable Free Cash Flow (FCF) available for discretionary use?
- What is the company's Net Leverage ratio?
- A lender provides a Term Loan A (TLA) at SOFR + 325 bps. If the TLA has a face value of $60M and the borrower'
- If the original sponsor equity was $270M, what is the Money Multiple (MOIC)?
- How much principal must be repaid in Year 1?
- What is the Debt Yield?
- What is the value created solely from multiple expansion?
- If exit net debt is $247.3 million, what is the resulting IRR for the sponsor?
- If the company has $200 million in total debt, what is the difference between the reported leverage and the ad
- What is its FCF conversion rate?
- What is the EBITDA used for covenant testing?
- If market yields increase by 100 bps, what is the approximate percentage price change using modified duration?