Complex Debt Structuring LBO Model-PE

The debt we have previously considered in other models is a). not realistic and b). incredibly simple. In reality, financing structures become very complex and are a major point of focus for most PE firms since financial engineering is an easy driver of returns. 

This is not really a scenario on its own, but it's a better picture of how debt is truly structured in any given LBO transaction.   

Remember, really try to figure things out on your own before 'cheating' with the answer sheet. Most of the newly introduced credit minutiae is written in plain English, don't overthink it.  

Goal: complete the template in under 45 minutes, model from a blank sheet in under 1 hour. Try to summarize in 3 sentences or less why this would or would not be a good investment purely based on the output of the model. 

Steps:

1. Download the prompt and use the attached template to assist your modeling 
2. Take a minute to look through the different sections of the model to understand where inputs may be flowing and where outputs are coming from (enhanced debt assumption)
3. Work the model top-down filling in the assumptions section, then the sources & uses, etc. You should only have to fill out the cells colored light gray 
4. After a first try, open up the answer file and really study the underlying formulas and the levers to impact returns 
5. Attempt the template again. After completing the template with no assistance from the answer file, open up a blank excel and try to build a model from scratch to answer the prompt

The_Pulse_LBO_Model_Debt_Other_Prompt.docx

The_Pulse_LBO_Model_Debt_Other.xlsx

The_Pulse_LBO_Model_Other_Debt_Answer.xlsx

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