In an anything-goes world for debt, there's a new definition for Ebitda: Eventually Busted, Interesting Theory, Deeply Aspirational.

That's the tongue-in-cheek assessment of a Moody's analyst who's been tracking earnings projections used by companies lately when asking investors for loans. Ebitda really means earnings before interest, taxes, depreciation and amortization, but borrowers have been stretching the limits of what's acceptable when they tweak their accounting to boost the figure.

The adjustments—known as “add-backs” in Wall Street lingo—make companies look more creditworthy by increasing revenue and earnings forecasts. They're legitimate when companies use them to factor out foreseeable or one-time events that might unfairly reduce the number. But in this frothy market, the size and vagueness of some add-backs seen in offering documents are raising eyebrows:

• Eating Recovery Center, which helps people with diet disorders, almost doubled Ebitda through add-backs for a debt sale last month to help finance CCMP Capital's purchase of a controlling stake in the company. Almost half of the add-backs were calculated on the basis that the company will “capture the true earnings potential” of its expanded treatment centers.
• When whitening-agent firm Kronos Worldwide Inc. asked lenders for 400 million euros last month ($470 million), its earnings formula allowed wiggle room for half a dozen specific future actions, such as mergers, “and any operational changes.” Kronos didn't say what that means.
• Avantor Inc.'s $7.5 billion financing, also last month, pitched an adjusted earnings figure amounting to a 91% hike. The industrial supplier claimed allowances such as shares awarded to employees as compensation, and operational benefits from a merger.
• GoDaddy Inc.'s offering back in February included 21 ways the web-hosting registration service could adjust Ebitda upward, including repeatable savings and synergies from anything it does, or expects to do, in “good faith” for a two-year period.

Derek Gluckman, senior covenant officer at Moody's Investors Service, who floated the cheeky definition for Ebitda, said frustrated investors have little choice but to buy because of the overheated market.