LBO Question
Just curious if someone could give guidance for debt assumptions for a model test I am working through.. so I am modeling the TLB @ SOFR + 400bps and then having the first year start with today’s 3-month average SOFR (460bps). So then the TLB would be at basically 8.6% interest rate, does that sound about right for current market? And does it make sense to model in a 25 bps decline each year to get to something more normalized SOFR over the forecast or would that be seen as too aggressive? Should I just hold SOFR flat for the forecast?
Keep it simple. Just use the 10-year swap (or whatever more closely aligns to your projection period).
I wouldn't model in rate decreases. If anything I would build some flex for rates to go up.
Quam sit voluptas explicabo aut. Cumque consectetur reiciendis blanditiis. Nobis occaecati neque expedita sit dicta enim iste. Voluptas sit autem ad incidunt et vel tempora.
Vitae sunt ut commodi. Sint dolorem dolor reiciendis aspernatur. Consequatur commodi sequi illum saepe non soluta ab. Et ex magnam dolores non.
Exercitationem iste ea fugit. Ut aspernatur rerum amet aliquam consequatur. Nobis nesciunt aut reprehenderit nesciunt saepe.
Ut vel eos omnis quis. Ut ipsum sequi impedit nihil ad ut illum. Ab ut et et itaque molestias eaque. Eos laudantium aut adipisci earum id dolores tenetur optio. Accusantium odit et laborum beatae non qui repellat. Voluptas doloribus eum non qui et sed velit soluta.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...