#127LBO Debt Schedule Ignores Mandatory Amortisation
lbo.hardLBO
1A1: Opening Debt =PriorYear!A5
2A2: Mandatory Amortisation -250.0
3A3: Cash Available for Sweep =CFO-CapEx+A2
4A4: Optional Paydown =MIN(A3,A1)
5A5: Closing Debt =A1-A4
6A6: Interest Expense =A1*7.5%
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#127PracticeHard22 min · 200 XP
LBO Debt Schedule Ignores Mandatory Amortisation
In an LBO model the leverage ratio plateaus instead of falling, and the sponsor return looks far worse than the same deal modelled by the counterparty.
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