Private Debt prep
Hi all,
I have an interview coming up for the Private Debt team of a PE firm. I dont have previous experience in acq/lev finance, only in classical M&A, therefore the debt side is quite unfamiliar to me.
Does anyone have a summary of the different debt structures, how they work, how does debt/mezz investing primarily work, how to create value from debt/mezz investments, etc. Would like to be as prepared as possible. Thank you!
structure - senior - cheap, up to 4x leverage depending on company, ~L+500, mezz - expensive, up to 6x, depending on company 12% (blend of cash/PIK), uni - up to 6x, blended rate similar to traditional senior/sub - one debt provider to deal with, likely sliced up behind the scenes to FO/LO, L+700
how to create value in PE cap markets role: get as much debt as possible at as favorable terms as possible, without critically wounding financing partner relationships
Any other questions, pm me.
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