Ironclad Steel Products · ICSP
DEMO DATAUNDERWRITING ASSUMPTIONHOLDReturn analysis — Senior Unsecured Notes 7.50%
HYPOTHETICAL INVESTMENT TERMSUNDERWRITING ASSUMPTION| Base Case | Downside | Severe Downside | Expected | |
|---|---|---|---|---|
| Outcome | Performing | Performing | Default (FY2029E) | |
| Face value (legal claim) | $100.0M | $100.0M | $100.0M | |
| Purchase price → cash investment | 97.0 → $97.5M | 97.0 → $97.5M | 97.0 → $97.5M | |
| Cash interest received | $22.5M | $22.5M | $30.0M | |
| Exit price (performing) / recovery proceeds (default) | 100.0 → $100.0M | 90.0 → $90.0M | $53.3M | |
| Capital gain / (loss) vs purchase price | $3.0M | ($7.0M) | ($43.7M) | |
| Total cash proceeds | $122.5M | $112.5M | $83.3M | |
| Valuation recovery % · loss given default | 100% · 0% | 100% · 0% | 52% · 48% | |
| Absolute profit | $25.0M | $15.0M | ($14.2M) | |
| MOIC | 1.26x | 1.15x | 0.85x | 1.17x |
| IRR (annual periods) | 8.5% | 5.3% | -3.7% | 5.4% |
| IRR (contractual timing, 1x/yr coupons) | 8.5% | 5.3% | -3.7% | 5.4% |
| Scenario probability | 55% | 30% | 15% | |
| Required return (hurdle IRR) → status | FAIL 12% | FAIL 12% | FAIL 12% | FAIL |
Expected column = IRR of the probability-weighted cash flows (5.4%), not the average of scenario IRRs (5.7%); IRR is non-linear. Contractual timing re-times the same coupon dollars to 1 payment(s) per year (settlement on a coupon date, no accrued interest); principal/recovery stay on annual dates. Fees: 0.5% of cost, paid at t=0. Per $100M face. Timing: coupons at period ends; default → recovery cash 1 period after the default period; performing exit at the hold period at the lesser of the scenario exit-price cap and valuation coverage at the exit multiple. Floating coupons include the scenario rate shock. Scenario weights 55% / 30% / 15%.
Sensitivity analysis — where is the risk / return attractive?
Sensitivity 1 — Purchase price vs IRR
| Purchase price (% of face) | Base Case | Downside | Severe Downside |
|---|---|---|---|
| 89.0 | 11.9% | 8.6% | -1.7% |
| 93.0 | 10.1% | 6.9% | -2.7% |
| 97.0 | 8.5% | 5.3% | -3.7% |
| 101.0 | 6.9% | 3.7% | -4.6% |
| 105.0 | 5.5% | 2.3% | -5.5% |
Sensitivity 2 — Exit / recovery value (% of face) vs IRR
| Proceeds (% of face) | Base Case | Downside | Severe Downside |
|---|---|---|---|
| 20.0 | -27.7% | -27.7% | -16.5% |
| 40.0 | -15.3% | -15.3% | -7.9% |
| 60.0 | -5.9% | -5.9% | -1.9% |
| 80.0 | 1.8% | 1.8% | 2.9% |
| 100.0 | 8.5% | 8.5% | 6.8% |
Sensitivity 3 — EBITDA margin shift vs IRR (full model re-run)
| EBITDA margin shift | Base Case | Downside | Severe Downside |
|---|---|---|---|
| -4.0 pts | 8.5% | 7.1% | -27.7% |
| -2.0 pts | 8.5% | 2.4% | -8.5% |
| +0.0 pts | 8.5% | 5.3% | -3.7% |
| +2.0 pts | 8.5% | 5.3% | 4.5% |
| +4.0 pts | 8.5% | 5.3% | 7.1% |
Sensitivity 4 — Revenue growth shift vs IRR (full model re-run)
| Revenue growth shift | Base Case | Downside | Severe Downside |
|---|---|---|---|
| -10.0 pts | 8.5% | 5.3% | 2.8% |
| -5.0 pts | 8.5% | 5.3% | -0.9% |
| +0.0 pts | 8.5% | 5.3% | -3.7% |
| +5.0 pts | 8.5% | 5.3% | -3.8% |
| +10.0 pts | 8.5% | 5.3% | -10.5% |
Sensitivity 5 — Interest rate (SOFR) shift vs IRR (full model re-run)
| SOFR shift | Base Case | Downside | Severe Downside |
|---|---|---|---|
| -1.0 pts | 8.5% | 5.3% | -3.7% |
| -0.5 pts | 8.5% | 5.3% | -3.7% |
| +0.0 pts | 8.5% | 5.3% | -3.7% |
| +1.0 pts | 8.5% | 5.3% | -3.7% |
| +2.0 pts | 8.5% | 5.3% | -3.7% |
Sensitivity 6 — Distressed valuation multiple shift vs target-tranche recovery %
| Multiple shift (x EBITDA) | Base Case | Downside | Severe Downside |
|---|---|---|---|
| -2.0x | 100.0% | 100.0% | 52.4% |
| -1.0x | 100.0% | 100.0% | 52.4% |
| +0.0x | 100.0% | 100.0% | 52.4% |
| +1.0x | 100.0% | 100.0% | 52.4% |
| +2.0x | 100.0% | 100.0% | 52.4% |
Sensitivity 7 — Recovery / exit value (% of face) vs MOIC
| Proceeds (% of face) | Base Case | Downside | Severe Downside |
|---|---|---|---|
| 20.0 | 0.44x | 0.44x | 0.51x |
| 40.0 | 0.64x | 0.64x | 0.72x |
| 60.0 | 0.85x | 0.85x | 0.92x |
| 80.0 | 1.05x | 1.05x | 1.13x |
| 100.0 | 1.26x | 1.26x | 1.33x |
Green ≥ hurdle IRR (12%) · amber = positive but below hurdle · red = loss (recovery table: green = full recovery, amber ≥ 60%). Every cell is the same calculation as the Excel Sensitivities tab; margin, growth, rate and multiple tables re-run the entire model (statements → debt → default → recovery → returns).
Return calculator
| Face value (legal claim) | $100.0M |
| Cash investment (face × price × (1 + fees)) | $97.5M |
| Current yield (coupon ÷ price) | 7.7% |
| Cash interest received | $22.5M |
| Exit / recovery proceeds | $100.0M |
| Capital gain / (loss) vs purchase price | $3.0M |
| Total cash proceeds | $122.5M |
| Absolute profit | $25.0M |
| MOIC | 1.26x |
| IRR | 8.5% |