LBO Related Question

I had a quick question on LBO:

Bank Debt 5.0x Sub Debt 2.0x Total Leverage 7.0x

I am practicing to build a model based on the above numbers. Do the leverage multiples indicate turn of leverage, which is Debt/ EBITDA ratio for each or simply 70% of the total capital stack above?

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saconsult3

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Turns... So, using the assumptions you listed above, if your EBITDA is $100mm, you should model bank debt of $500mm and sub debt of $200mm for total debt of $700mm and a total multiple of 7.0x.

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