Module IV· Cash SweepBasic
Question
What is the difference between 'mandatory repayment' and 'voluntary / accelerated repayment'?
Answer
| Aspect | Mandatory | Voluntary / Sweep |
|---|---|---|
| Trigger | contractual schedule | sponsor decision / CFADR |
| Example | TLA at 5%/yr | excess-cash sweep on the TLB |
| Modeling | hardcoded | dynamic (CFADR-driven) |
| Order | first | after mandatory |
Debt-roll order
- Year-Begin Balance
- − Mandatory Repayment
- − Voluntary / Cash Sweep
- = Year-End Balance
Pitch tip
'What if CFADR is negative?' → Mandatory stays, voluntary = 0. Extreme stress: draw the RCF, otherwise a covenant breach.