Title says it all — what % of EV is being financed with each type of debt, and what are the interest rates? I would imagine these have changed recently given the general economic climate.
| +143 | Future of PE | 32 | 8h |
| +34 | Best industry/job for entrepreneurship? | 9 | 6h |
| +20 | How to Get on Career Track / Stay Post ASO years | 6 | 4d |
| +18 | What are you actually using AI for in PE? | 3 | 8h |
| +18 | Burn Out in PE - What Comes Next? | 3 | 17h |
| +15 | KKR comp for Principal | 20 | 3d |
| +12 | MBA and Private Equity | 6 | 1d |
| +11 | Buyside in London with nice WLB and pay | 2 | 21h |
| +10 | Undergrad summer PE analyst positions | 3 | 1d |
| +9 | 2028 Oncycle PE | 11 | 19h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
This is mostly in the DL market, since the syndicated market is effectively shut
1L - 30-50% LTV (higher end is uni and priced on high end of range) - S+600-750 depending on leverage/credit quality (S is >4%), upfront fees of 2-4%
HY market - basically closed for sponsor finance
2L - tough, but doable at typical ~400-500 bp premium to 1L for a solid business
Mezz - available, fixed rate product still in the 15% coupon range (split of cash/PIK negotiable)
Pref/PIK notes - available, 18%-20% area
Conditions are generally the most lender favorable that they have been in many years
Thank you so much!!!
Numbers seem off.
1L (not uni/stretch) is going 3-4x lev, 450-550 spread, 1-4% OID. HSD yields.
Stretch Sr. 4-5x lev, 500-600 spread, similar OID. HSD yield for better quality credits, higher for riskier business.
Uni - 5-6.6x lev, 650-700 spread, 2-3% OID. HSD or low double digit YTM.
2L - 1-1.5 turns above 1L, 800-900 spread, 2-3% OID. Typically 375-400 bps yield above 1L. Think low teens YTM.
Fixed rate notes (private placements) going for 12-14% YTM.
Pref. equity, 13-16% depending on PIK, cap stack.
this was mostly right 9 months ago, but things have widened
Agree w AKBOS. This was probably true Q2/Q3 of last year..
What is HSD?
Agree with levels but would say that 2L is only doable if 1L is syndicated (which is the hard part now) so currently you just unitranche and blend 1/2L.
Pref is the new equity: sponsors are using it to tranche their own capital injections rather than leaving it to 3rd party lenders (or so is my experience).
Agree except no one talks about debt in LTV terms but in xEBITDA terms
Both matter with LTV arguably more. One matters more for interest affordability, the other on principal risk.
Ok. 100m EBITDA company. 5x EBITDA. What’s the price range?
Unclear of what deal size you are talking about, which makes a significant difference. SPP publishes a decent report that should provide enough high-level guidance for your question. January 2023 update here, https://drive.google.com/file/d/1M97BoM5eK-gQgd6RvsMaxafMdp2gw8VM/view
Which base rate / interest floor in European LBOs are you using?
Excepturi cupiditate sequi voluptate ut sequi ab molestiae. Voluptatibus esse eius autem qui error ea.
Suscipit culpa adipisci eius assumenda. Dolores vitae mollitia adipisci ut. Eum et ut sint facere dolorem.
Rerum quis qui distinctio rerum. Inventore ut et delectus ut iste omnis. Autem impedit repellendus aut. Quasi soluta excepturi et repellat vero amet harum. Illo sed quod sequi et suscipit voluptatibus perspiciatis.
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...