AFP
CTP · Question #250
(Topic 3) Company ABC, with a current debt rating of BBB- from Standard & Poor's, is negotiating a new revolving credit agreement with its lenders. The company anticipates closing on a small…
The correct answer is A. ratings trigger. See the full explanation below for the reasoning.
Question
- (Topic 3)
Company ABC, with a current debt rating of BBB- from Standard & Poor’s, is negotiating a new revolving credit agreement with its lenders. The company anticipates closing on a small acquisition within a year of executing this new agreement and would like maximum flexibility to determine its capital structure. The company is MOST concerned about the lenders’ inclusion of A.
Options
- Aratings trigger.
- Bgrowth rate covenant.
- Cchange in control covenant.
- Dlimit on internal financing.
How the community answered
(26 responses)- A73% (19)
- B15% (4)
- C8% (2)
- D4% (1)
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