technical help
IB
Tags:
(Baboon, 116
Points)
on 8/20/09 at 7:02am
In a LBO, does the debt on the lowest portion of the captial structure of the model get retired first? Or is it the credit revolver? i've seen both ways.






The credit revolver should
The credit revolver should be retired first. Senior debt will always have requirements to be paid down before any of the subordinated debt. If the senior debt has a different paydown structure, i.e, bullet paydown instead of being amortized, then yes the sub-debt could be paid off first in that aspect.
sdf
sorry, i meant after all mandatory amortization is completed. Then does a company usually retire its revolver or start with like term loan C