StrikeAndYield crib sheet · information and education only

Leveraged Finance

Debt raised against a company's own cash flows in order to buy it — the financing behind private equity, and what decides whether a buyout happens at all.

The desk — 9 transaction types

Easy 3

Bolt-on acquisition	A portfolio company buying a smaller one. The arithmetic is the point: a low multiple bought into a higher one.
Dividend recapitalisation	A company borrows more and pays the proceeds to its owners. Nothing about the business changes; its balance sheet changes completely.
Leveraged buyout	A company bought largely with borrowed money, secured on the company itself. The price is worked out backwards from the financing.

Medium 5

Bridge to bond	A loan that exists to be replaced. It lets an acquisition be announced with certain funds months before the bond can be sold.
Continuation vehicle	A fund sells an asset to a new fund it also manages. Existing investors choose cash or staying in — and the manager is on both sides.
Stapled financing	The seller's own bank offers a pre-arranged financing package to whoever buys — and sits on both sides of the same table.
Term Loan B	The institutional loan that funds most buyouts. The bank commits first and sells afterwards, and the gap is its exposure.
Unitranche	One lender, one instrument, one signature. The sponsor pays more for a financing that cannot fall apart before funding.

Hard 1

Mezzanine finance

Debt between the senior lenders and the equity. Paid last among lenders, first among owners — and the intercreditor agreement is the deal.

What drives this desk

How much debt the market will lend against cash flow — Sets the buyer's maximum price directly
The gap between what banks underwrite and what investors buy — The underwriting bank carries the difference
Covenant terms, not only price — What the borrower may do later is negotiated at the start
The exit that has to exist before the entry — No credible exit, no deal
Holding periods that have run long — Pushes towards selling, refinancing or paying a dividend
The private credit alternative — Certainty of financing against price

The calendar

The auction's second round	Bidders receive the financing structure the seller expects
Signing, with the commitment attached	The debt is committed in writing before it is raised
Syndication, weeks after signing	The committed debt is sold to funds and other banks
The first covenant test after closing	The forecast meets reality on a defined date
The refinancing, well before maturity	Leveraged debt is refinanced repeatedly, rarely repaid

Which blocker decides, across the desk

Blocker	Decides	Share
Price	5 of 9	56%
Financing	6 of 9	67%
Approval	0 of 9	0%
Diligence	0 of 9	0%
Execution	3 of 9	33%

Counted from the same table each transaction page prints. Not a rating and not a ranking: there is deliberately no total.