medium · Private Credit underwriting-credit-analysis
Sponsor X is choosing between a $100 million unitranche (all cash interest) and a multi-tranche with a $30 million mezzanine layer. The mezzanine carries a 12.0% total coupon (8.0% cash + 4.0% PIK).
If the company's EBITDA is $25 million and all other debt interest is $6.0 million, what is the interest coverage ratio including the PIK?
- 2.23x
- 2.60x
- 3.00x
- 3.57x
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