Leveraged Buyout Model & Refinancing

The speaker continues the discussion on a leveraged buyout model and refinancing scenarios.  First, he covers some of the basic fees associated to a LBO; these include, the revolver capacity, term loan fees, senior notes fees, and subordinated notes fees.  He then moves into the Tender costs.  These are the costs associated with refinancing the debt.  To appropriately develop the tender costs, one needs to create a full timeline and cash flow model for each tranche of debt and calculate the net present value for each.

He covers how to determine the costs associated with these items in three different scenarios; one with no transaction costs, one with no refinacing of debt, and one where all debt is refinanced.