easy · Private Equity pe-core

A sponsor provides an 'Equity Cure' to a portfolio company. What is the standard purpose of this action in a leveraged buyout?

  1. To pay an immediate special dividend out to the LPs
  2. To remove the sitting CEO from the company without stated cause
  3. To prevent a financial covenant breach by injecting capital
  4. To raise the interest rate charged on the company's senior secured debt

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