Debt Structure Analyzer
Design optimal debt structures and stress-test leverage for M&A and corporate finance
What You Can Do
You can rapidly evaluate debt alternatives, model leverage metrics across financing scenarios, and stress-test capital structures against revenue decline and rising rate scenarios. The skill enables you to assess covenant headroom, compare debt instruments, and design debt paydown schedules aligned with deleveraging targets—producing analysis suitable for credit committees, lender discussions, and client board presentations.
Features
calculate and benchmark net debt/EBITDA, debt/equity, and interest coverage across scenarios
assess financial covenant headroom and design reset mechanics for material changes
evaluate term loans, bonds, convertibles, and unitranche facilities by cost, tenor, and flexibility
model capital structures under revenue decline, EBITDA compression, and rising rate scenarios
project debt paydown schedules against cash flow forecasts and target leverage profiles
evaluate credit rating implications and lender appetite thresholds
identify optimal leverage levels that balance cost of capital with financial flexibility
generate structured memos with peer benchmarks and risk mitigation recommendations
Example Output
Example 1: LBO Capital Structure Analysis
- Proposed leverage: 4.5x net debt/EBITDA at close, 3.8x Year 3
- Senior secured term loan: $250M at SOFR + 325 bps
- Subordinated debt: $100M at 9.5% PIK toggle
- Covenant package: Total leverage, senior secured leverage, interest coverage
- Stress scenario (15% EBITDA decline): Leverage rises to 5.2x; covenant cushion narrows to 12%
- Recommendation: Reduce sub debt to $75M or negotiate covenant waiver language
Example 2: Refinancing Analysis
- Current: $300M term loan maturing Year 5 at SOFR + 400 bps
- Refinancing scenario: $280M fixed at 5.75% due Year 8
- Rate savings: ~$3.2M annually; extended maturity profile reduces near-term refinancing risk
- Deleveraging pathway: 3.2x leverage at close → 2.1x Year 5 under base case cash flow
Example 3: Covenant Stress Summary
- Base case leverage: 3.8x; covenant threshold: 4.5x (cushion: 65 bps)
- 25% EBITDA decline scenario: 4.8x leverage (exceeds covenant by 30 bps)
- Recommendation: Negotiate 4.75x covenant threshold or implement quarterly covenant resets tied to forward EBITDA expectations
What's Included
- SKILL.md: complete skill instruction file with debt analysis frameworks
- Leverage ratio templates: automated calculators for net debt/EBITDA, debt/equity, interest coverage, and debt service coverage
- Covenant modeling framework: covenant package design checklist with headroom analysis and stress-test matrix
- Debt instrument comparison matrix: term loans vs. bonds vs. convertibles vs. unitranche with cost, tenor, and flexibility dimensions
- Deleveraging schedule template: debt paydown projection against cash flow forecast with multiple scenario paths
Who It's For
- Investment bankers — M&A advisory and debt financing specialists structuring acquisition and refinancing mandates
- Credit analysts — evaluating debt capacity, covenant compliance, and capital structure risk
- Corporate development teams — assessing leverage limits and debt paydown priorities for portfolio companies
- Restructuring advisors — designing debt-for-equity swaps and capital structure recapitalization
- Private equity sponsors — optimizing leverage for LBO and add-on acquisition scenarios
Best For
- LBO and acquisition financing capital structure design
- Refinancing scenario modeling and debt maturity management
- Covenant headroom assessment and reset mechanics negotiation
- Stress-testing leverage under downside revenue and EBITDA scenarios
- Credit committee memos and lender presentation preparation
- Peer benchmarking and debt instrument comparison analysis
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