Building a Capital Stack Analysts and Lenders Both Trust

The problem with a capital stack built in a single pass

A capital stack that's typed into a spreadsheet once and never touched again looks fine right up until a lender asks 'what happens to coverage if the mezz tranche moves to 12%?' — and the honest answer requires rebuilding half the model.

Every lever change recalculates the whole stack

T.HESIS's Capital Stack Builder models senior term loan, second lien, mezzanine, preferred equity, and LP common as a single connected structure. Moving any one lever — a rate, an advance rate, a waterfall tier — recalculates blended WACC, coverage ratios, and FCCR immediately across the whole stack, not just the tranche that changed.

For an OpCo/LBO deal specifically, the same builder handles the equity waterfall and PIK toggle structure, so a sponsor promote calculation and a lender's coverage test are reading the exact same underlying numbers rather than two versions maintained separately.

What this replaces

It replaces the version of this work most teams still do by hand: a capital stack tab that gets manually updated after every term sheet revision, with WACC and coverage recomputed off to the side and prone to falling out of sync with the stack itself.