| Arranger | One or several commercial or investment banks that structures, arranges, and administers a syndicated loan. |
| Bilateral | Involving a single lender and a single borrower. |
| Bookrunner | Main underwriter or manager in a new issuance of a debt security. |
| Bridge Loan | A short-term loan providing immediate cash flow that is used until a company secures permanent financing. Loans are typically short-term, relatively high interest, and backed by collateral. |
| Bullet Loan | Loan requiring a balloon payment at the end of the term. This arrangement anticipates a refinancing of the loan to meet payment obligation. |
| Collateralized Loan Obligation (CLO) | A security backed by a pool of debt, which includes several levels of credit ratings and repayment structures. |
| Covenant | An indenture in a formal debt agreement for certain activities to be carried or not carried out. |
| Covenant-Lite (Cov-Lite) | A loan with limited restrictions on the debt-service capabilities of the borrower, including fewer restrictions on collateral and payment terms than traditional covenants. |
| Debenture | Debt instrument backed exclusively by the creditworthiness and reputation of the issuer, generally issued by governments and corporations. |
| EBITDA | Earnings before Interest, Taxes, Depreciation, and Amortization. Usually where cash flow for debt repayment is sourced. |
| First Lien | Primary rights of a creditor to sell the collateral property of a borrower that fails to meet the obligations of a loan contract. |
| Fixed Rate | A predetermined rate for either the entirety or part of a loan term. |
| Floating Rate | A variable interest rate that moves with market factors or an index. Opposite of a fixed rate. |
| High Yield | Investments in debt securities that are below investment grade. Such bonds typically pay higher yields than investment-grade government or corporate bonds to compensate for the perceived higher risk of default. |
| Non-Bank Lender | Also referred to as ‘shadow bankers,’ any entity engaging in loan activity and not classified as a banking institution. Examples are private equity firms, specialty finance companies, and hedge funds |
| Non-Performing Loans (NPLs) | A loan that is in default or is close to being in default. |
| Non-Sponsored | A direct loan transaction between a lender and borrower without involvement of a private equity sponsor. |
| Notes | Certificates evidencing the amount owed by the private placement borrower to the investor. Transferable on completion of a certificate sent to the borrower. |
| Payment in Kind (PiK) | Arrangement that pays interest or dividends to investors of bonds, notes, or preferred stock with additional debt or equity instead of cash. |
| Primary Loan | Loan made directly to a borrower/company.
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| Private Debt | Non-listed debt issues. May take the form of bonds, notes, or loans. Includes all non-bank lending.
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| Refinance | Revising or replacing an older loan with new debt offering more favourable terms for the borrower. |
| Revolving Credit | A line of credit allowing the borrower to use funds when they are needed, depending on cash flow needs. |
| Royalty-Backed Lending | An alternative loan to be repaid using a percentage of the borrowing business’s revenue, traditionally found in industries such as mining, film production, and drug development. |
| Second Lien | Debts that are subordinate to the rights of other, more senior debts issued against the same collateral. |
| Secondary Loan | A loan sold on a secondary market. |
| Secured Loan | A loan backed by the borrower’s assets, typically real estate, equipment, or cash flows.
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| Senior Stretch | A type of loan to a business that includes characteristics of both asset-based and cash-flow loans. Senior stretch loans are cheaper than cash-flow loans as the borrowing company has a healthy balance sheet. |
| Special Purpose Vehicle (SPV) | A company that has activities limited to buying and financing certain assets by issuing bonds to investors. |
| Sponsored | A deal involving a third-party purchase of a company, typically a private equity firm. |
| Subscription Credit Facility | Short-term loans provided to alternative asset fund managers to cover transactional costs, suppressing the need to immediately call up capital from limited partners. |
| Syndicated | A loan offered by a group of lenders that work together to provide funds to a single borrower. |
| Term Loan | Bank loan for a specific amount that has a pre-determined repayment schedule as well as a floating interest rate. |
| Term Loan B | A sub-prime loan to a borrower with credit graded ‘B’ according to credit history. |
| Term Loan C | A sub-prime loan to a borrower with credit graded ‘C’ according to credit history. |
| Unsecured | A loan not backed by collateral or assets. |