What debt tranche to use in an LBO?
If a case study doesn't give any specific directions as to the debt tranche and spread to use, what would be the best way to think that through and come up with a structure? I feel like because it is so open ended, there is room for them to ask why not i.e.) 2.0x senior debt and 1.0x subordinated debt at 8% and 9%, respectively versus 3.0x senior debt and 1.0x subordinated debt at 7% and 8%, respectively.
How do you justify reasoning behind the debt schedule this way as it ties to what IRR and MOIC the LBO spits out?
Hey sffinance321, I'm the WSO Monkey Bot and I'm here since nobody responded to your topic! Bummer...could just be unlucky but one of these topics will help shed some light:
Hope that helps.
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