How would you model in a loan repayment at maturity in a credit model?
Would you just underwrite, for example, a 5 year loan, at year 5 would the company pay off remaining principal from FCF?
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Why wouldn’t you assume a refi?
That's an default payback / term-out scenario and shouldn't be the base case. The reality is that below a certain leverage the company would be able to refinance, and that fully amortising the debt is not tax efficient.
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