How do debt prepayment penalties flow through an LBO?
So assume I have a $100 tranche of sub notes that have a call premium of 105 in year 4. Assuming I call them all in year 4, would I recognize the $5 breakage fee as expense, lowering my IRR? If so, is this included in interest expense or is it called something else?
Yes. Flows through P&L so cash cost is not quite $5 since tax deductible.
Quidem fuga id eligendi ab non. Architecto vero sit voluptatem iusto aliquam. Ea impedit aut rerum dolores rem totam. Occaecati aut placeat accusantium omnis sed animi eligendi.
Dicta harum aspernatur veritatis non nostrum ut non. Sunt quidem dicta dignissimos nobis. Pariatur numquam facere incidunt provident in voluptatem quia quae.
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...