Finance Deals & Syndicated Lending · glossary
Debt compared with earnings: is the debt too big for the business to repay? Sunrise requires Total Net Debt of no more than three times EBITDA, and exactly three times still passes. Definition: Leverage · Chapter 9
Explained in Chapter 9, Undertakings and Financial Covenants, of Finance Deals & Syndicated Lending.
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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on any testing date, the ratio of Total Net Debt on that date to EBITDA for the 12-month period ending on that date;Read the definition in the document →
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