Term Loan B
A floating-rate senior-secured institutional loan that has been the dominant form of LBO senior debt since the mid-2000s. Typical features: SOFR + 250-500 bps spread, 7-year maturity, 1% per year mandatory amortization with bullet repayment at maturity, prepayable at par at any time, cov-lite (incurrence rather than maintenance covenants), syndicated to institutional investors (CLOs, private credit funds, hedge funds). Term Loan B is the load-bearing prepayment tranche for cash-sweep purposes because of its any-time prepayability and senior-secured priority.
Lessons that use this term
Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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