Debt schedule example: the $2.7 billion term loan behind a take-private

Permira and Warburg Pincus financed the $8.4 billion take-private of Clearwater Analytics with $5.7 billion of equity and a $2.7 billion first-lien term loan from a group of private credit lenders. This page rolls that loan forward from the June 25, 2026 close, on the outside-in case and on management’s plan from the LBO model.

A lender reading the schedule would flag five things:

• Leverage at close is 9.6x LTM March 2026 adjusted EBITDA of $280.5 million (9.4x first-lien net), and still 7.9x first-lien net at the end of 2026.
• Cash interest cover is 2.1x in 2026 and 2.4x in 2027 and 2028. Counting the interest paid in kind, it is 1.5x and 1.7x.
• $134.5 million of PIK interest accrues by June 2028, so total debt stays above the $2.7 billion funded until 2028.
• No paydown is required. The loan has no amortization, and the excess cash flow sweep falls to zero once first-lien net leverage is at or below 7.50x, which the outside-in case reaches by the end of 2027. Every dollar repaid is the sponsor’s choice.
• The one financial covenant is out of reach. It sits on the revolver, at 15.00x, and is tested only when net revolver usage exceeds $260 million.

A downside does not break the loan; it stops it from deleveraging. With growth 3 points and margin 1.5 points below the outside-in case every year, total debt stays above the $2.7 billion funded through 2029, and the downside section shows where the tests are missed.

The terms

The $3.5 billion package is one first-lien term loan with no amortization, a delayed draw for acquisitions and a revolver. The only financial covenant sits on the revolver.

* The base sweep percentage is set in a precedent credit agreement that is not filed; 50% is the model’s assumption.

The incurrence terms do more work than the covenant. Below 7.25x first-lien net leverage, which the outside-in case reaches at the end of 2027, the term sheet allows unlimited dividends to the sponsor. The loan can grow by the greater of $350 million and 100% of EBITDA without a ratio test, and by more at 8.00x first-lien net leverage or below. EBITDA for these tests can include planned synergies of up to 35% of Consolidated EBITDA.

The schedule

PIK interest accrues only until the option ends in June 2028, three fiscal years, and adds $134.5 million, so the term loan is still above the $2.7 billion funded at the end of 2027. From 2027, every dollar of paydown is the sponsor’s optional sweep.

The term loan pays SOFR plus 2.25% in cash while the PIK is elected and capitalizes the other 2.25% plus a 0.25% step-up. That step-up costs $6.75 million a year on the funded loan before compounding, the price of deferring cash interest in the two tightest years. The margin steps down to 4.25% from 2028, once first-lien net leverage at the end of 2027 is 6.7x.

The required sweep never takes cash. In 2027, cash available for debt service is $74 million, below the $119 million threshold (the greater of $105 million and 30% of EBITDA), and from 2028 the sweep percentage is zero. The model sweeps all cash above the $75 million minimum from 2027, after the 1% soft call ends, rising from $74 million in 2027 to $174 million in 2030. Net debt reaches $2,310 million by 2030 on the outside-in case and $1,777 million on management’s plan, the same as the LBO model.

Leverage and coverage

On the outside-in case, cash interest cover stays under 3x through 2030. Management’s plan reaches 4.7x by 2030 on $191 million more EBITDA.

The covenant

At close, EBITDA could fall 38% before first-lien net leverage reached the 15.00x covenant; by 2027 the cushion is 55%. The covenant is not tested in any year of either case.

The covenant springs only when revolver drawings net of cash exceed $260 million. With the $75 million minimum cash on the balance sheet, even a fully drawn $325 million revolver stays below that. The test that binds earlier is the delayed draw’s: first-lien net leverage at the end of 2026 is 7.9x, 0.08x inside the 8.00x pro forma test, so an acquisition funded by the delayed draw has to wait for 2027 EBITDA or bring enough EBITDA of its own.

Financing scenarios

None of the financing choices moves the 2030 IRR by more than 0.6 points. What they move is coverage: paying the PIK in cash takes the lowest interest cover from 2.1x to 1.5x and draws $24 million on the revolver.

• PIK paid in cash. Cash interest through 2030 rises from $832 million to $948 million, and the revolver covers the shortfall in 2027. The 2030 IRR stays at 21.1%: paying in cash avoids the 0.25% step-up but leaves less to sweep, and 2030 net debt is only $18 million lower.
• Add-on on the delayed draw. An illustrative $500 million acquisition at 15.0x EBITDA in 2027 leaves first-lien net leverage at 7.4x pro forma, inside the 8.00x draw test, and at 4.6x in 2030 instead of 4.0x. The IRR rises to 21.4%: the add-on is funded entirely with debt and grows 10% a year, and it is bought and exited at the same 15.0x.
• SOFR up 100bp. The 2030 IRR falls to 20.8% and the lowest interest cover to 1.8x; the revolver draws $6 million. At +200bp the IRR is 20.5%. The 0.50% floor never binds.

A true downside

In a downside with growth 3 points and margin 1.5 points below the outside-in case every year, the loan holds: cash interest cover bottoms at 1.96x in the 2026 stub, the revolver draws $2.8 million once, and the covenant is never tested. What the downside costs is deleveraging and the incurrence tests.

By 2030 the downside earns $90 million less EBITDA than the outside-in case, $483 million. The free cash flow after interest is too thin to sweep much, so total debt rises with the PIK to $2,774 million in 2027 and is still $2,728 million in 2029. Leverage falls only because EBITDA grows: from 8.7x gross in 2026 to 5.5x in 2030.

• The incurrence tests are where a downside shows. At the end of 2026 first-lien net leverage is 8.5x, so the margin stays at 4.50% for 2027 and a delayed-draw acquisition is blocked; the 8.00x test is missed by 0.50x. In 2027 the step-down is met by 0.02x, and the 7.25x dividend test is still missed by 0.23x.
• Paying the PIK in cash costs liquidity, not solvency. Cash interest cover falls to 1.42x in 2026 and the revolver peaks at $62 million in 2027, a fifth of the commitment, before it is repaid by 2030.
• SOFR up 200bp is the stress that hurts. Cash interest cover is 1.45x in 2026 and only 1.51x in 2028, and 1.10x counting the PIK. The revolver funds the interest every year and reaches $127 million in 2030, so total debt is $2,966 million in 2030, above where it started, and first-lien net leverage is still 6.0x. The step-down is missed again in 2027, at 7.72x.
• The covenant is still out of reach. In none of the three does net revolver usage approach the $260 million trigger; in 2026 EBITDA could fall another 43% on the downside before first-lien net leverage reached 15.00x.

At the outside-in case’s 25.0x exit, the downside returns 14.2% and 1.83x, and 13.5% with SOFR up 200bp. A lender would read the downside as a covered credit with no deleveraging; a sponsor would read it as a deal below a 15% return.

Methodology. Terms are from the amended and restated debt commitment letter of January 21, 2026 and the merger proxy (DEFM14A, April 8, 2026). Where they are silent, the model’s assumptions are labeled in the workbook: a 50% base excess cash flow sweep, financing fees and OID of 2.0% of the term loan, SOFR held flat at 3.53%, $75 million minimum cash, a 100% optional sweep from 2027, step-downs tested on the prior year-end, and adjusted EBITDA before stock-based compensation standing in for Consolidated EBITDA. The outside-in and management cases are the LBO model’s; the downside uses the drivers of the sensitivity analysis, with cash taxes built the same way. The model was built in Compound; it rebuilds work a lender or deal team could have done and is not the lenders’ or buyers’ model.

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