Capital Markets Deal Structure Advisor
Model financing alternatives and stress-test capital structures for M&A and corporate transactions
What You Can Do
You can rapidly evaluate multiple financing structures for M&A, recapitalizations, and growth transactions by modeling different capital stack configurations and comparing them against recent comparable transaction benchmarks. The skill helps you assess debt capacity, analyze covenant headroom across downside scenarios, and stress-test leverage under EBITDA decline, capex disruption, and refinancing risk—enabling you to present optimized structures that balance cost of capital, covenant flexibility, and stakeholder requirements in client presentations and pitch books.
Features
Build and compare multiple financing scenarios (debt, equity, preferred structures) with automatic pro forma calculations
Assess debt capacity and calculate key credit metrics (leverage ratio, interest coverage, DSCR) against market benchmarks and rating agency guidelines
Model maintenance covenants across downside cases (EBITDA decline, capex spikes, revenue disruption) to identify covenant headroom and amendment risk
Create structured documents with financing rationale, capital structure diagrams, pro forma financials, and term sheet summaries
Benchmark your proposed structure against recent comp financing and evaluate cost of capital optimization
Handle multi-currency structures, tax efficiency considerations, and regulatory capital requirements
Analyze pro forma credit metrics against S&P, Moody's, and Fitch rating methodologies
Generate detailed debt capacity analysis, leverage sensitivity tables, and supporting analytics for syndication and credit committee presentations
Example Output
Scenario 1: LBO Leverage Analysis
Base Case Capital Structure:
- Senior Debt: $450M (4.5x EBITDA)
- Subordinated Debt: $150M (1.5x EBITDA)
- Equity: $200M
- Total: $800M
Year 1 Pro Forma Credit Metrics:
- Net Leverage: 4.8x | Interest Coverage: 2.3x | DSCR: 1.2x
Downside Stress (20% EBITDA decline):
- Net Leverage: 6.2x | Interest Coverage: 1.8x | DSCR: 0.9x
- Covenant Breach Risk: High — Fixed Charge Coverage below 1.0x maintenance
Scenario 2: Comparable Transaction Benchmark
| Metric | Your Structure | Market Median | Variance |
|---|---|---|---|
| Entry Leverage | 4.5x | 4.8x | -6% |
| Pricing (Sr. Debt) | SOFR + 325bps | SOFR + 350bps | +25bps savings |
| Tenor (Sr. Debt) | 7 years | 6.5 years | +6 months extension |
| Covenant Package | Full suite | Full suite | Aligned |
Scenario 3: Covenant Waterfall Summary
- Year 1: Fixed Charge Coverage 1.8x (maintains 1.5x minimum with 20% cushion)
- Year 2: Net Leverage covenant 5.5x (projected 4.9x vs. 5.0x max)
- Refinancing pressure: Low — covenant cushion adequate through Year 3
What's Included
- SKILL.md instruction file with capital structure modeling methodology:
- Capital Stack Template: Pre-built model for senior debt, mezz, preferred, and equity layers with pro forma calculation logic
- Leverage Stress Scenario Framework: Downside case templates (EBITDA decline %, capex inflation, refinancing lag) with automated ratio recalculation
- Covenant Maintenance Checklist: Fixed charge, leverage ratio, interest coverage, and DSCR covenant tracking across quarterly/annual periods
- Comparable Transaction Benchmark Workbook: Recent comp financing data structure for pricing, tenor, and covenant comparison
- Deal Memorandum Outline: Executive summary, capital structure rationale, pro forma financials, term sheet summary, and credit metric analysis sections
Who It's For
- Investment bankers and M&A advisors structuring corporate transactions and financing packages
- Private equity associates and partners evaluating leverage capacity and LBO feasibility
- Corporate development teams analyzing recapitalization and refinancing alternatives
- Debt capital markets professionals preparing lender meetings and syndication materials
- Credit analysts and treasury professionals assessing debt capacity and covenant risk
Best For
- M&A transaction structuring and deal economics modeling
- Leverage and debt capacity analysis for acquisitions and recapitalizations
- Covenant stress-testing and downside scenario planning
- Comparable transaction benchmarking and financing alternative evaluation
- Client presentation preparation and pitch book development for financing strategies
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