Leveraged Finance & Credit
A company has a $75mm revolver (undrawn), $500mm first-lien TLB, $150mm second lien, $250mm senior notes, and $50mm cash, on $200mm EBITDA. Compute first-lien, secured, total, and net leverage.
Model answer
First-lien debt = $500mm (revolver undrawn, so excluded) -> first-lien leverage = 500/200 = 2.5x. Secured debt = first + second lien = $500 + $150 = $650mm -> secured leverage = 650/200 = 3.25x.…
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