RCM Diligence — Covenant Stress — SeekingChartis Corpus

🛡️ Public data only — no PHI permitted on this instance.

Working dealEAST ALABAMA MEDICAL CENTER·$20.0M EBITDA

Deal MC Covenant Stress Payer Stress Bear Case Reg Calendar Full Pipeline

Covenant Stress Lab

EAST ALABAMA MEDICAL CENTER

3 tranches · $104M funded · 3 covenants tested · 500 simulated paths

Entry Leverage

5.22×

better than 5.50×–7.00× PE healthcare LBO band

Base Rate

5.5%

better than 7.7%–9.4% 2025/2026 LBO median

Max Breach Prob

100%

worse than 10%–25% bank-acceptable band

FAIL

"Interest Coverage" covenant crosses 50% breach probability in Y1Q1 — $0.5M median equity cure.

Net Leverage: peak 4% in Y5Q1 (median metric 4.15 vs threshold 5.50) · DSCR: peak 100% in Y6Q1 (median metric 0.70 vs threshold 1.25) · Interest Coverage: peak 96% in Y3Q1 (median metric 1.93 vs threshold 2.50)

Max Breach Prob

100%

vs <10% bank target · <25% acceptable

Earliest 50% Breach

Y1Q1

quarter any covenant first crosses 50% breach probability

Simulated Paths

500

synthetic EBITDA trials

Quarters Tested

6-year horizon

Plain-English read: Above PE-bank acceptable ceiling (>50% breach). Lenders typically re-price, tighten, or walk at this level.

Per-quarter breach probability — all covenants

● <10% breach — bank comfortable● 10-25% — tight but bankable● 25-50% — negotiate cushion● ≥50% — re-price or walk

Plain-English read: First covenant to hit 50% breach probability is DSCR in Y6Q1.

How to read: Each line is one covenant. Y-axis is probability of breach across simulated EBITDA paths in that quarter; X-axis is quarters from close. Dashed lines mark 25%, 50%, 75% probability thresholds. Hover any dot for the exact metric value. A line rising sharply through 50% is the covenant to negotiate at the LOI — reset, cushion, or step-down deferral.

Debt service cliff — quarterly stack

Plain-English read: Peak quarterly debt service is $27.61M in Y6Q1 ($110.4M annualized). At a 1.5× DSCR floor, the target needs $165.7M LTM EBITDA in that quarter to stay inside the covenant.

How to read: Each bar is one quarter of debt service. Red is interest on outstanding balance; amber is scheduled amortization. TLB/unitranche bullets concentrate amortization in the final year — that spike is where refinance risk concentrates. Flat interest early = floating-rate base stable; steepening = rate-path stress.

Equity cure sizing · partner sponsor capital required

Covenant	First Cure Q	Median Cure	P75 Cure	Breach Path %
Net Leverage	Y1Q1	$5.82M	$11.55M	4% of paths
DSCR	Y1Q1	$0.86M	$0.96M	100% of paths
Interest Coverage	Y1Q1	$0.45M	$0.63M	96% of paths

How to read: For leverage covenants the cure equals the debt paydown that drops leverage to threshold; for coverage covenants it's the synthetic EBITDA add allowed by the credit agreement ("yank-the-bank" provision, capped at ~25% of LTM EBITDA). P75 shows the right-tail scenario — the partner should underwrite equity capacity for at least P75.

Covenant detail — peak breach + first-at

Green/amber/red cells reflect PE-bank underwriting thresholds — click any column to sort, CSV exports auto-wired.
Covenant	Peak Breach %	Peak Quarter	50% First At	25% First At	Median Cure $	Breach Path %	Interpretation
DSCR	100%	Y6Q1	Y6Q1	Y6Q1	$0.9M	100%	FAIL — renegotiate covenant or walk
Interest Coverage	96%	Y3Q1	Y1Q1	Y1Q1	$0.5M	96%	FAIL — renegotiate covenant or walk
Net Leverage	4%	Y5Q1	never	—	$5.8M	4%	PASS — clears bank norms

Capital stack detail

Capital stack · senior-first
Tranche	Type	Principal	Term	Spread bps	Amort	Lien
TLB	TLB	$67.8M	6y	+450	1% + bullet	L1
Unitranche	UNITRANCHE	$26.1M	6y	+600	1% + bullet	L1
Mezzanine	MEZZANINE	$10.4M	6y	+950	IO + bullet	L2

Cross-reference

→ Deal MC produced the EBITDA cone that feeds this lab · → Regulatory Calendar produced the overlay applied above · → Exit Timing uses the same leverage path for refinance feasibility.

JSON export — full stress report

Press ? for shortcuts · b to bookmark · ⌘K to jump