I’m curious what interest rates to use for senior loans and revolver facility in LBO. My understanding is that senior loan interest should be priced at SOFR + 3%. Is this correct? Additionally, should revolver rates be applied against Libor or against SOFR? Appreciate the help!
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Senior should be sofr +600 in this market
S+675 at 97
Lenders are demanding 1.5x+ interest coverage (EBIT less maintenance capex over interest), so keep it in that range.
Pull SOFR from Chatham financial
Thanks! Excuse me if this is a dumb question, but where on Chatham are you pulling the 675 and 97? When I go to Chatham and look at the 3-month Term SOFR at Jan 19 it is 4.65%.
Spreads and pricing are from the market, chatham just gives you the forward curve
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