Why Might You Use Bank Debt Rather Than High-yield Debt In An Lbo?

1.	Why Might You Use Bank Debt Rather Than High-yield Debt In An Lbo?
Answer» If the PE FIRM or the company is concerned about MEETING interest payments and wants a lower-cost option, they might use bank DEBT; they might also use bank debt if they are planning on major expansion or Capital Expenditures and don't want to be restricted by incurrence COVENANTS. If the PE firm or the company is concerned about meeting interest payments and wants a lower-cost option, they might use bank debt; they might also use bank debt if they are planning on major expansion or Capital Expenditures and don't want to be restricted by incurrence covenants.

Answer»

If the PE FIRM or the company is concerned about MEETING interest payments and wants a lower-cost option, they might use bank DEBT; they might also use bank debt if they are planning on major expansion or Capital Expenditures and don't want to be restricted by incurrence COVENANTS.

If the PE firm or the company is concerned about meeting interest payments and wants a lower-cost option, they might use bank debt; they might also use bank debt if they are planning on major expansion or Capital Expenditures and don't want to be restricted by incurrence covenants.

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