Module VI· Debt Schedule MechanicsIntermediate
Question

How do you model optional repayment versus cash sweep?

Answer

Optional repayment is discretionary debt paydown using excess cash. Cash sweep is a formula-driven repayment based on available cash or excess cash flow. Model both after mandatory amortization and minimum cash needs. Use MIN formulas to cap repayment at outstanding debt and available cash. Follow the contractual waterfall by tranche.