Key question
How does FX rate volatility threaten leverage covenants — and how to hedge the accounting mismatch between spot and average rate?
Enter your company data
Balance sheet structure · debt and EBITDA by currency
| GBP | CHF | |
|---|---|---|
| Debt | demo | demo |
| EBITDA | demo | demo |
No Hedging
Under GBPCHF scenario: spot -8%, average -4% over the reporting period (spot to 1.363, average — 1.422) leverage rises from 4.0x to 4.09x — above the 4.0x threshold. Pros: no premium cost. Cons: the covenant is breached whenever H1 < AR — i.e., whenever the debt currency strengthens against the period average rate.
Net Debt / EBITDA · base
GBP 400m / 100m
GBPCHF rate 1.481
Net Debt / EBITDA · stress -8%
GBP 417m / 102m
spot 1.363 · average 1.422
Leverage (stress)
4.09x
⚠ covenant breach
Demo is based on historical data. In the full version — current data, your currency, your company's portfolio.