LBO_What is the common Interest rate and payment schedule for an LBO

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by a searcher
in Hồ Chí Minh, Thành phố Hồ Chí Minh, Việt Nam

3yrs ago

LBO_What is the common Interest rate and payment schedule for an LBO

Dear Searchers,

We are looking into an LBO structure for our deal in SEA. The offerred interest rate is 9% in USD (after-tax) and principal is repaid every six months. I am wonder if there is any searcher who has the experience in doing an LBO deal and which would be your recommended terms/cost for the loan.

Much appreciated

1 Like

104 Views

reply by a searcher 3yrs ago
from University of Texas at San Antonio in San Antonio, TX, USA

Most deal structures include a portion considered as the “airball” and then any other conventional structure based on the industry and collateral available. Each deal is unique and the equity required can vary dramatically from deal to deal. Seller carry notes that may also be a factor are important to consider and relevant to the senior debt structure. Most rates will float at a spread over an index with leverage based pricing. These rates vary based on industry and cash flow. Amortizations of the airball portion will likely be comfortable enough to account for ongoing capex and working capital needs and may include a cash flow recapture to accelerate the repayment of the unsecured principal.

I’m happy to discuss in more detail. Send me a message for more details.

reply by a searcher 3yrs ago
from Oklahoma State University in Wichita, KS, USA

Thank you for the post. Following the thread.