I am working on doing a debt restructuring model for a company and want to know if I can add the Interest Rate Swap expense back ( as interest )to my earnings since it would be wiped out with the debt restructuring.
It would be adding 5,000,000 to my EBITDA
Anyone do this before? It makes my numbers that much more compelling to the new creditors.
Thanks in advance
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Interested as well. I think you would need to expense it back at market price, which would depend on the reference price so I don't know how you would mark to market so far out in the future.
you should keep in mind that the swap will crystallise, become pari with seniors and then you'll have to take out a new swap for the (probably smaller) new floating debt, but swap costs may be higher (but most likely not as most swaps these days are so out of the money because they locked in at 4%)..
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