Leverage Finance in a Nutshell from the First Principles

If Debt is

3 X EBITDA
5 X EBITDA
7 X EBITDA

With more than 7 something weird overpaying?

5 to 7 Usual
3 times EBITDA something odd.

Syndicated Loans – Loans with more than one lender

Quoted Loans are bonds

Mass value of the world is in the All Corporate Loans; the way you create liquid;
Non-Standard terms in the documents are found out when you read.

As the interest rates rise the multiple of the cash flow borrowed will reduce in an
smooth exponential pattern.

Cash > Land> Freehold Property>Trade Debtors > Machinery and Plant> Work in
Progress> Stocks. The trend of the liquidity after

Pre and Post Crisis Loan Terms

Margins Increased and the Interest rate decline. The fees however went through the
roof.

 PE
 Mezzanine
 Banking
Type of Debt Instrument- “Tranches”
How much debt does this company need to trade?
Decreasing Order of Risk

 Super Senior RCF (Revolving Call Facility)- This is a secured loan

 Tranches A
 Tranches B
 Secured Loan
 Mezzanine

Unitranche combines the various tranches into one instrument that covers all the
loans in the capital task.

Working Capital Adjustments