Cash Sweep
Short definition
A cash sweep is mandatory prepayment of defined excess CFADS. In LBOs and project finance it cuts leverage fast and restricts dividends and investment.
Detailed explanation
Definition: which cash is “excess”, which capex is permitted, which cash is minimum? The sweep is packed with dividend lock-ups.
A high sweep eats flexibility; a low sweep leaves debt outstanding. PIK and junior may sit outside the sweep — senior is swept first.
Why it matters for the CFO
The sweep turns a profitable year’s cash toward debt, not holders. Unplanned, “profit but no dividend” is a surprise.
How it is calculated
Süpürme ≈ max(0, CFADS − borç servisi − izinli kasa) × sweep %
Variables in the formula
- Sweep %: contract share of excess cash prepaid
How to read it
Sweep % fights growth capex. If the contract writes permitted investment tightly, growth stays below SGR.
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Definitions are educational. They are not investment, credit or tax advice.