Distressed LBO
An LBO where the portfolio company has materially missed plan and is trading toward or in restructuring territory. Operational signals: covenant breach, missed mandatory amortization, repeated PIK elections, declining EBITDA below baseline, mid-cycle ratings downgrade. Sponsor signals: dividend-recap reversal, exit-multiple compression, holding-period extension beyond plan, capital injection from sponsor to cure covenant default. Recovery analysis on distressed LBOs assumes meaningful mezz impairment, equity-kicker dilution at exit, and sponsor-equity loss in the 50-100% range depending on the senior-debt recovery and exit timing.
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Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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