Debt capacity term loan A, workout. In this model, we're going to calculate how much we can borrow in a term loan A based on the bank case cash flows that are being pulled from the model that we built in the credit scenarios workout. So I, we can see that we have the bank case activated, we have our free cash flows calculated, we want to figure out how much we can borrow based on those cash flows. So it's going to be a six year term loan and we have an after tax cost of debt of 3.75%. What I need to do then is create an MPV formula which tells me the present value of the future bank case cash flows of the next six years. So my rate is going to be the 3.75 and then I need to go ahead and select my next six years of cash flow and I get a loan of 864.6. If we scroll down to the amortization schedule, we can then see how much can be repaid in each year. If it's an amortizing loan the bank is going to want to know this in terms of setting a schedule for repayment. The ending balance of the loan is simply going to be what it is at time zero, the 864.6, and then that will become the beginning balance at the beginning of the next year. My accrued interest is simply going to be my after tax cost of debt, anchored times the beginning balance. And in terms of the interest that I actually pay out, that's going to be the opposite of that, it's cash out. The debt repayment is simply going to be the free cash flow amount net of the interest paid. So I have 123.7 after paying interest of free cash flow that I can then use to pay down the loan. Because this is a cash out flow, I'm going to flip this amount, and my ending loan balance is simply the sum of those two. If I copy these across through year six, the loan should pay down to zero by the end of year six, and it does.

So if we look down into the ratios, what we see is we have total debt to EBITDA as of year zero of 3.2 times. Now, what this is effectively, sort of a leverage market thing, you'll either use EBITDA from the last 12 months or you'll use EBITDA from the first full year and you'll compare that amount to the total leverage amount at the beginning of the year before any amortization has occurred. So we have here, since we don't have an LTM calculation, I'm just using the full year one EBITDA and that's giving me a total debt to EBITDA 3.2 times and that's about where it should be. Usually the maximum debt to EBITDA for just the term loan A is in the two to three times range. So it's a little bit on the high side, but not entirely out of range.