1. Bonds & Loans The Covenant Trajectory: 5 Key Indicators
Christine Tadros
Head of European Research
18 October 2018
status: confidential

2. HIGH YIELD IN DISGUISE 1
HYBID Loans

3. EBITDA As Main Basket Measure2
Uncapped Add-Back:
Projected Synergies
EBITDA As Main Basket Measure

4. QAD = quantifiable additional debt (ex: credit facilities basket)
LEVERAGING  3
QAD = quantifiable additional debt (ex: credit facilities basket)

5. VALUE LEAKAGE - € 4 The Restricted Payments covenant
Loans with HY-Style RPs BUBs
HYB RPs – BUB Starter Amount
HYB - Deleveraging required by
leverage-based RPs
YES NO
1.0x+ 1x-0.5x <0.5x NONE N/A

6. VALUE LEAKAGE - ASSETS 5 The Asset Sales covenant
Loans – Leverage-based Asset Sale Step-downs
Bonds – Leverage-Based Asset Sale Step-downs

7. Bonds & Loans The Covenant Trajectory: 5 Key Indicators
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status: confidential