medium · Private Credit underwriting-credit-analysis
In the ECF bridge, if a company spends $50 million on an acquisition, how is this typically handled?
- Acquisitions are ignored and the sweep is calculated as if the cash was still on the balance sheet.
- Acquisitions are added to EBITDA as a non-recurring gain.
- Permitted acquisitions are often deducted from the ECF amount, similar to capital expenditures.
- The sweep percentage increases to 100% to compensate for the higher risk.
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