Convertible investments and IRR calculation
Hi,
I found this deal online and am thinking about how to calculate the PE's IRR of a convertible debt investment.
https://www.bloomberg.com/press-releases/2019-11-…
It confuses me how to build the convertible debt investment into a DCF/LBO model- what assumptions would I need to make? e.g., calculate the basic/dilutive EPS periodically (say, end of every year) and decide whether to convert? Does PE receive the debt repayment+cash interest until they convert it, or the convertible will come with a PIK?
Thank you.
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