Table of Contents
How is senior debt calculated?
There are several measures to typically estimate a company’s maximum subordinated debt: Total debt to EBITDA ratio of 5-6 times. As mentioned above, senior debt typically accounts for 2-3 times debt to EBITDA, hence the remaining for subordinated debt. EBITDA to cash interest of about 2 times.
How do you calculate funded debt?
Funded debts are calculated as long-term liabilities minus the shareholders’ equity.
What is included in senior funded debt?
Total Senior Funded Debt means total outstanding debt owed to the Bank by the Borrower plus all unsubordinated seller debt owed by the Borrower, all other indebtedness for borrowed money, capitalized leases, and any indebtedness secured by a lien on property owned by the Borrower.
What is senior debt on a balance sheet?
Senior Debt, or a Senior Note, is money owed by a company that has first claims on the company’s cash flows. It is more secure than any other debt, such as subordinated debt (also known as junior debt), because senior debt is usually collateralized by assets.
What is super senior debt?
Super-senior debt. Senior lenders are those who are in the best position if a company gets into difficulties with its debt as the senior lenders have first call on the unsecured assets (before other lenders).
What is senior debt ratio?
Senior Debt Ratio means, with respect to any Loan, the ratio of Senior Total Funded Debt to TTM EBITDA of the related Obligor, calculated in accordance with the corresponding amount or ratio in the underlying Related Documents for such Loan utilizing the most recently delivered financial results for the related Obligor.
How do you calculate funded debt to total capitalization?
Funded debt = Debentures + Mortgage loans + Bonds + Other long-term loans. Total Capitalization = Equity Share Capital + Preference Share Capital +Reserves and Surplus + Other Undistributed Reserves + Debentures + Mortgage Loans + Bonds + Other long- term loans.
Where is total funded debt on financial statements?
Total debt is the sum of all long-term liabilities and is identified on the company’s balance sheet.
What is senior debt and junior debt?
Senior debt is repaid first if the borrower encounters a default or liquidation. It is usually secured debt with collateral; however, it can also be unsecured with specific provisions for repayment seniority. Generally, junior debt and subordinated debt is unsecured debt that is not backed by collateral.
Are letters of credit considered funded debt?
Funded Debt and Letter of Credit Exposure means all outstanding indebtedness for borrowed money and other interest-bearing indebtedness, including current and long term indebtedness, plus all outstanding Letters of Credit, plus the product of eight (8) times all lease and rental expense calculated on a rolling four (4).
Which of the following represents funded debt?
Which of the following represents funded debt? Funded Debt is a corporate term used to describe debt that has one year or more to maturity, therefore the corporate mortgage bond would represent funded debt.
What is the difference between senior and mezzanine debt?
Mezzanine debt is a hybrid form of capital that is part loan and part investment. Senior debt is a loan from a bank. Banks lend off of asset values so most senior loans are collateralized with assets. The bank loan is always secured and in the first position.
Is sub debt a debt or equity?
Subordinated debt is any debt that falls under, or behind, senior debt. However, subordinated debt does have priority over preferred and common equity. Examples of subordinated debt include mezzanine debt, which is debt that also includes an investment.
What is a senior unsecured debt?
Senior Unsecured Debt means indebtedness for borrowed money that is not subordinated to any other indebtedness for borrowed money and is not secured or supported by a guarantee, letter of credit or other form of credit enhancement.
How is goodwill calculated?
To calculate goodwill, the fair value of the assets and liabilities of the acquired business is added to the fair value of business’ assets and liabilities. The excess of price over the fair value of net identifiable assets is called goodwill.
Is RCF senior debt?
Senior debt Alternatively, in a ‘pari’ structure, term and RCF facilities sit alongside senior secured bonds. Here the loan facility and the bonds rank equally.
Is revolving credit facility senior debt?
Revolving credit facility (revolver), which can be paid down and reborrowed as needed. – Term debt (senior and subordinated) with floating rates. Payments-in-kind (PIK) toggle allows no interest payment and increase in principal.
What is super senior RCF?
What is it? Labelled ‘first out’ in the US and ‘super senior’ in Europe, this is a revolving credit facility (RCF) which has priority over other pari passu debt in relation to the proceeds of enforcement of collateral and, in the US, guarantee recoveries.
How do you calculate senior leverage ratio?
To calculate this ratio, find the company’s earnings before interest and taxes (EBIT), then divide by the interest expense of long-term debts.
What is funded debt to Ebitda?
Funded Debt/EBITDA: Funded Debt is the total debt to the agency and EBITDA is Net Income adjusted for Taxes, Depreciation, and Amortization. So, when you look at Funded Debt to EBITDA, you should think about a range of 4 to 6 times.
What is a funded debt?
Funded debt refers to any financial obligation that extends beyond a 12-month period, or beyond the current business year or operating cycle. It is the technical term applied to the portion of a company’s long-term debt that is made up of long-term, fixed-maturity types of borrowings.
What is funded debt/equity ratio?
The debt-to-equity (D/E) ratio is used to evaluate a company’s financial leverage and is calculated by dividing a company’s total liabilities by its shareholder equity. The D/E ratio is an important metric used in corporate finance.
How do you calculate funded debt to Ebitda?
The debt/EBITDA ratio is calculated by dividing the debts by the Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA). The main target of this ratio is to reflect the cash available with the company to pay back its debts, and not how much income is being earned by the firm.
