Loan Spread
In a floating-rate loan or bond, the fixed margin added to the reference rate (typically SOFR) to compute the all-in interest rate. For example, a corporate loan at "SOFR + 250 bps" has a Loan Spread of 250 basis points (2.5 percentage points). The Loan Spread reflects the borrower's credit risk and stays fixed for the life of the loan; the reference rate floats. Distinct from Credit Spread (which is a market-derived yield difference between two bonds of similar maturity but different credit quality).
Lessons that use this term
Related terms
10Y Treasury · Altman Z-Score · Asset Sensitivity · Basel III · Bond ETF · Bretton Woods
Open this term in the app → — no account needed; browse the full glossary while you research.