Leveraged Finance & Credit
What is a make-whole provision?
Model answer
A make-whole lets the issuer redeem a bond before its first call date but only by paying a premium that compensates investors for lost future coupons. The redemption price equals the present value of…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from Leveraged Finance & Credit
- Rank a standard LBO capital structure from cheapest to most expensive cost of capital, and explain why the ordering holds.
- A sponsor buys a company at 6.0x EBITDA of $200mm ($1.2bn EV). They want 4.0x total leverage. Sketch a plausible debt stack by tranche and the equity check.
- Why would a deal include both a TLB and senior notes rather than just maxing out the term loan?
- What does 'pro-rata' vs. 'institutional' tranche mean in a leveraged loan package?
- Explain the typical amortization profile of a TLB and what a '1% amort with bullet' means for the lender.
- What is an excess cash flow (ECF) sweep, and how does the sweep percentage typically step down?