Finance Deals & Syndicated Lending · glossary
Earnings compared with the interest bill: can the business pay its interest with room to spare? Sunrise requires EBITDA of at least four times its net finance charges. Clause 17.1 · Chapter 9
Explained in Chapter 9, Undertakings and Financial Covenants, of Finance Deals & Syndicated Lending.
Also explained in Security & Collateral.
Leverage compares the Group's debt with its earnings for the past 12 months, measured as EBITDA (roughly operating profit, explained in 9.4). It asks whether the debt is too big for the business to repay. Interest Cover compares the same earnings with the interest bill. It asks whether the business can pay its interest with room to spare.Read Chapter 9, Undertakings and Financial Covenants →
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