Solution-Calculate gross leverage and net leverage

Calculate gross leverage and net leverage

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Reference no: EM133110071

Bright Semiconductor specializes in semiconductors that are used in autos, communication equipment, and industrial machinery, which are cyclical industries. This high-yield-rated company's debt structure is complicated because of the many levels of seniority that resulted from the company's 2006 leveraged buyout by a consortium of private equity firms. Below is a simplified depiction of the company's debt structure and some key credit-related statistics.

Bright Semiconductor Financial Information (in Millions)
Cash	$1,050
Total Debt	$7,611
Net Debt	$6,561
Interest Expense	$590
EBITDA	$990
Debt Structure (in Millions)
Secured Debt (Bank Loan and Bonds)	$4,899
Senior Unsecured Bonds	$1,948
Subordinated Bonds	$764
Total Debt	$7,611

Using the Information Provided, address the following:

Calculate gross leverage and net leverage, as measured by Debt/EBITDA, through each level of debt, including total debt.
Why might Bright Co have so much secured debt relative to unsecured debt (both senior and subordinated)?

Reference no: EM133110071

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Calculate gross leverage and net leverage

Reference no: EM133110071

Reference no: EM133110071

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