hard · Private Equity
A private credit deal has a 'Maintenance Covenant' set at 5.0x Net Debt / EBITDA. At the end of Year 1, the company has EBITDA of $40M and Net Debt of $210M. The LPA allows for an 'Equity Cure'.
What is the minimum equity injection required to bring the company back into covenant compliance?
- 2M of EBITDA equivalent.
- $210M
- $10M
- $50M
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