medium · Private Equity advanced-lbo
A mezzanine lender, Crescent Credit, provides a $50M subordinated loan to support an LBO. The loan carries a 10% cash interest rate and 4% PIK (Payment-in-Kind) interest.
What will be the principal balance of the loan at the end of Year 1, assuming no voluntary prepayments or amortizations?
- $55M
- $50M
- $52M
- $57M
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