About
Credit analysis you can check.
Credit Investor publishes single-name credit research across leveraged loans, high yield bonds and distressed debt. Every piece comes with the capital structure, the recovery math and the model, so a reader can test the conclusion and not just read it.
What you will find here
- Credits. One page per company: the capital stack, leverage through each class, what each class recovers across a range of valuations, the maturity schedule and our view by tranche.
- Models. The Excel workbook behind each credit page, with live formulas, plus templates you can use on any company.
- Research. Methods and primers: how to read a capital structure, what a bond price implies about value, where the fulcrum sits.
- Videos. Walk-throughs of the credits and the models.
- Tools. The same calculations, in the browser, for any numbers you type in.
How we do the math
The same definitions are used on every page, in every tool and in every workbook.
Leverage
Face value of debt divided by adjusted EBITDA for the last twelve months. “Into” a class counts the debt ranked ahead of it. “Through” a class adds the class itself. Net leverage subtracts cash.
Rank
Each instrument has a rank that reflects both its lien and where in the corporate structure it was issued. Rank 1 is paid first. Instruments with the same rank share pro rata. A revolver counts at the amount drawn.
Recoveries
Enterprise value is a multiple times EBITDA, paid down the stack in order of rank. We leave out balance-sheet cash, professional fees, new financing raised in a restructuring, and claims other than funded debt. That makes the result a first pass, good for seeing where value breaks and how sensitive each class is. It is not a plan of reorganization.
Created at
The multiple of EBITDA you pay for the business by buying a class at its market price: debt ahead at face value, plus the class at its price, less cash, divided by EBITDA.
Yield
Yield to maturity on a semi-annual basis from price, cash coupon and maturity. For floating-rate loans we hold today’s base rate flat to maturity. Yields above 40% are shown as n.m., because at that point price is a statement about recovery and not about return.
Interest cover and free cash flow
Interest is the run rate on today’s debt at today’s rates, not the figure from the last income statement. Interest that is paid in kind is left out. Free cash flow is EBITDA less capital spending, cash interest, cash taxes and any other recurring cash costs we identify.
Disclosures
Everything on this site is research and educational material. None of it is investment advice, a recommendation tailored to any person, or an offer to sell or a solicitation to buy any security, loan or other instrument.
Figures come from public filings, other public sources and our own estimates. They may be wrong, incomplete or out of date. Prices are indicative. Check the source documents before relying on anything here.
The authors and their affiliates may hold positions in the credits discussed and may trade them at any time without notice. Views are those of the authors on the date of publication and can change.