Bridge Loanis a term used frequently in investment banking,private equityandventure capital. It is a loan which is used to enable a firm to undertake an acquisition / takeover /LBO/ IPO. In anLBOor other corporate acquisition-type activity, the PE or VC firm will go to theinvestment bankto seek abridge loan, then will make the purchase of the target company. The firm will then use its newly acquired target to issue corporate high-yielding bonds to pay off thebridge loan, and then will use future cash flows to pay the bond yields. In an IPO, thebridge loan担保以确保那t the company can continue operating whilst it navigates through the tumultuous time of IPO'ing onto the stock market. The company will give theinvestment banksome stock at a cheap price in order to pay off thebridge loan, and theinvestment banksells the stock (if it so wishes) in order to recoup its loan.
**To learn more about this concept and become amaster atLBOmodeling, you should check out ourLBOModeling Course.Learn more here.**
Module 1: Introduction
Module 2:LBOThe Big Picture
Module 3: Valuation and Transaction Assumptions
Module 4: Sources and Uses: The Theory
Module 5: Sources and Uses: Application to Nike Case
Module 6: P&L Projections &LBOAdjustments
Module 7:债务计划
Module 8: Balance Sheet and Adjustments
Module 9: Taxes
Module 10: Exit, Returns, &Sensitivity Analysis
Bonus Module A) Purchase Price Accounting
Bonus Module B) Dividend Recap
Bonus Module C) Add-on Acquisition Build
**To learn more about this concept and become a master at bonds and fixed income, you should check out our Bond Course - Fixed Income (coming soon!).**
Related Terms
- Acquisition
- Bond
- Debt
- Free Cash Flow (FCF)
- Investment Banking Division (IBD)
- Initial Public Offering (IPO)
- Leveraged Buyout (LBO)
- Private Equity (PE)
- Takeover
- Venture Capital (VC)
- Yield
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