Mock caseCase study with presentation

Ares Mock Case Study – Leveraged loan credit case

Private Credit Fund

An independent practice case, not supplied or endorsed by the named firm.

Assess a building-materials distributor's leveraged loan, model a recession case and recommend an allocation.

Time allowed: 2 hours, plus a 15-minute presentation
Difficulty: Intermediate
Sector: Industrials: building materials distribution
Region: Continental Europe
Currency: EUR
Reference: EA-35

Skills practised

Credit analysisDebt sizing and capital structureScenario analysisOperating leverage and cost savingsFinancial analysisInvestment recommendation

At a glance

Assess a building-materials distributor's leveraged loan, model a recession case and recommend an allocation. You have two hours, a lender-presentation extract and a partly completed model. Prepare a 15-minute presentation covering leverage, liquidity, debt service and recovery risks.

The brief

You are an analyst at a Private Credit Fund that invests in leveraged loans. The arranging banks have launched syndication of the senior facilities that finance the buyout of Wyndrake Building Materials ("Wyndrake" or "the Group") and have circulated a public-side lender presentation. Your portfolio manager wants a 15-minute presentation and a clear recommendation on the TLB: decline, under-weight (UW), market-weight (MW) or over-weight (OW). Market-weight means the fund's usual allocation to a new loan of this size; under-weight and over-weight mean taking less or more than that.

The lender presentation extract below is your only information pack. It shows management's figures, including management's adjustments; part of your job is to test them.

The fund's credit committee wants a downside case, not management's plan. The additional information for the modelling is:

A major recession hits the EU in FY2027 (the year to 30 June 2027).
Volumes stabilise in FY2028, but the building-materials market stays in overcapacity until FY2029, so prices and margins remain under pressure until then.
75% of FY2025A SG&A costs are fixed; the remaining 25% are variable.
The tax rate is 25%.

The transaction is expected to close by the end of June 2026. For the model, treat the pro forma capitalisation at 31 December 2025 as the opening position for FY2026E.

This case requires paid access.

Company overview (members only)
Financial information (members only)
Transaction assumptions (members only)
Your tasks (members only)
Format and rules (members only)
How to approach it (members only)
Solution (members only)

Starting files

Candidate template (members only)

Solution files

Solution model (members only)

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Ares Mock Case Study – Leveraged loan credit case

Private Credit Fund

An independent practice case, not supplied or endorsed by the named firm.

Assess a building-materials distributor's leveraged loan, model a recession case and recommend an allocation.

Time allowed

2 hours, plus a 15-minute presentation

Difficulty

Intermediate

Sector

Industrials: building materials distribution

Region

Continental Europe

Currency

EUR

Reference

EA-35

Skills practised

Credit analysisDebt sizing and capital structureScenario analysisOperating leverage and cost savingsFinancial analysisInvestment recommendation

The brief

The lender presentation extract below is your only information pack. It shows management's figures, including management's adjustments; part of your job is to test them.

The fund's credit committee wants a downside case, not management's plan. The additional information for the modelling is:

A major recession hits the EU in FY2027 (the year to 30 June 2027).

Volumes stabilise in FY2028, but the building-materials market stays in overcapacity until FY2029, so prices and margins remain under pressure until then.

75% of FY2025A SG&A costs are fixed; the remaining 25% are variable.

The tax rate is 25%.

The transaction is expected to close by the end of June 2026. For the model, treat the pro forma capitalisation at 31 December 2025 as the opening position for FY2026E.