Metrics

EBITDA

Also known as: earnings before interest taxes depreciation amortization

status: draft

Earnings before interest, taxes, depreciation, and amortization. A proxy for operating cash flow used to evaluate borrower creditworthiness and set leverage covenants in leveraged lending and CLO collateral.

What to watch

Adjusted EBITDA can diverge significantly from reported EBITDA. Add-backs for “one-time” expenses, synergies, and pro forma adjustments inflate the denominator in leverage ratios. When evaluating CLO collateral or direct lending deals, compare adjusted versus unadjusted EBITDA. Large add-backs (over 20% of EBITDA) warrant scrutiny on whether the adjustments are realistic.

Referenced in 17 topics

ABF vs. traditional lending (when ABF makes sense, when it doesn't) foundations Broadly syndicated loan CLOs asset-classes Cell tower and data center ABS (digital infrastructure) asset-classes Covenant cures and waivers mechanics Entity-level triggers mechanics Financial covenants mechanics Infrastructure debt asset-classes Middle market CLOs asset-classes Private placement / bespoke structures structures Rail cars and rolling stock asset-classes Reps, warranties, and enforcement documentation Small business loans (including SBA 7(a)) asset-classes Subscription finance / capital call lines structures Trade receivables and supply chain finance asset-classes Treasury management for multi-facility originators playbooks Trigger remediation strategies mechanics Whole business securitization asset-classes