medium · Private Credit & Debt underwriting-credit-analysis
A $200,000,000 RCF for a large cap borrower has a25%springing leverage trigger. The borrower has drawn $48,000,000. EBITDA is $150,000,000 and Net Debt is $950,000,000.
If the covenant limit is 6.0x, is there a breach?
- No, leverage is 5.8x.
- Yes, the leverage is 6.33x.
- Yes, because utilization is near the threshold.
- No, the covenant is not triggered.
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