What is the difference between a pricing grid and a leverage grid?
Grid-based pricing determines loan pricing based either on the credit rating, the leverage ratio or any other agreed upon metric of the borrower . Leveraged facilities agreements commonly use a margin ratchet linked to one or more of debt, interest and cash flow coverage.
What is grid pricing?
Grid prices, or value-based marketing, refers to pricing cattle on an individual animal basis. Prices differ according to the underlying value of the beef and by-products produced from each animal.
What is a financing Grid?
The funding grid is an internal planning tool that gives you an overview of who is funding what at the project, program or organizational level. It is a table which shows the total budgeted expenditure for the project and what elements of the project activities and expenditure are covered by each funding source.
What is leveraged debt?
A leveraged loan is a type of loan that is extended to companies or individuals that already have considerable amounts of debt or poor credit history. Leveraged loans for companies or individuals with debt tend to have higher interest rates than typical loans.
What is CLO debt?
A collateralized loan obligation (CLO) is a securitization product created to acquire and manage a pool of leveraged loans. CLOs issue multiple debt tranches along with equity and use the proceeds from the issuance to obtain a diverse pool of syndicated bank loans.
What is a grid in leveraged finance?
A grid used to determine the applicable margin of a loan as determined by a performance measurement such as the credit rating of the borrower (or the loans) or the borrower’s leverage ratio at a given point in time. Pricing grids may also be used to determine commitment fees for revolving loans.
How does a CLO fund work?
How do CLOs work? CLOs combine multiple elements with the goal of generating an above-average return through income and capital appreciation. CLO tranches are ranked highest to lowest in order of credit quality, asset size, and income stream – and thus lowest to highest in order of riskiness.
What is the full meaning of CLO?
A chief learning officer (CLO) is a senior-level executive who ensures that a company’s corporate learning program and strategy supports its overall business goals.
What is leverage with example?
An example of leverage is to buy fixed assets, or take money from another company or individual in the form of a loan that can be used to help generate profits. The definition of leverage is the action of a lever, or the power to influence people, events or things. An example of leverage is the motion of a seesaw.
How does a grid based pricing grid work?
Grid-based pricing determines loan pricing based either on the credit rating, the leverage ratio or any other agreed upon metric of the borrower .
How is a margin grid used in a term loan?
A margin grid is a matrix used to adjust the margin (price) of a term loan or revolving credit facility and, where applicable, a commitment fee during the term of facilities usually based on a credit rating of the borrower and/or a specific financial ratio, commonly net-debt to EBITDA ratio.
What is the interest rate on a leveraged facility agreement?
For example, if the issuer’s debt to EBITDA is less than 3x, pricing is Euribor + 275; if such ratio decreases to 2.5x, pricing is Euribor + 250. Leveraged facilities agreements commonly use a margin ratchet linked to one or more of debt, interest and cash flow coverage.