Understanding Loan Tranches And Mechanics ( Credit...

[The Credit Agreement] [The Loan] 1. Amount and Terms of the Loans; Letters of Credit 2. Understanding Loan Tranches and Mechanics (Credit Agreement) 3. Tranches of Loans A borrower will generally have various financing needs for its business, some of which may be more appropriately met with a revolving credit facility and others more appropriately met with a term loan facility. Revolving credit facilities permit the borrower to borrow, repay and reborrow loans from time to time during the life of the credit facility, up to an agreed cap amount, so long as the conditions to each borrowing are met. Term loan facilities are generally drawn all at once and may not be reborrowed once repaid. For a borrower’s ongoing business operations, a revolving facility that allows it to borrow and repay as needed may make more sense than receiving a one-time term loan, while a borrower may want a term loan to fund an acquisition where they will need to have the full purchase price available on the acquisition date. In many financing transactions the borrower will want access to both a revolving facility and a term loan. For example, to finance an acquisition, the borrower will likely want a term loan to finance all, or a portion of, the purchase price for the target company and after the acquisition, the borrower will likely need a revolving facility for working capital. To meet these needs, credit agreements and facilities are often divided into multiple â€Å"tranches† eachShow MoreRelatedA Note On Subprime Loans1565 Words   |  7 Pagesdeceived home buyers by promoting subprime loans, and then they passed on bundled documents to unwary investors. These subprime loans were offered at a rate above prime to individuals who did not qualify for prime rate loans. The loans were made to people who had no other way to access funds, and little understanding of the mechanics of the loan. A scholarly document on subprime lending by Hanif NuMan warns, â€Å"Servicing prime and alternative- A ( not subprime) loans, the automated underwriting systems wereRead MoreLeveraged Buyouts Essay8240 Words   |  33 Pages(Table of Contents) 1. 2. 3.LBO 4.TXU 5. LBO 6. (Overview of Leveraged Buyouts) (Mechanics of an LBO Analysis) (LBO Best Practices) (TXU Case Study) (LBO Modeling) (Homework Assignment) (Appendix) 1. Overview of Leveraged Buyouts (LBO) Overview of Leveraged Buyouts An LBO is the acquisition of a company or division of a company using debt for a majority of the purchase price and equity for the remainder. The buyer (the LBO Sponsor or Equity Sponsor) borrows the debt portion ofRead MoreSovereign Debt Crisis7683 Words   |  31 Pageshas been rate as junk bond in the market; however with the help of EU, it could actually make Greece back to track and possible paying the yield which is higher than any national bond. Minister from the other country could find this review as understanding on the policy would not work for a country in debt crisis. They should also avoid the step Greece did to prevent debt crisis in their country. This literature review will give reader an idea of the Euro debt crisis in Greece which the first EuropeanRead MoreDamodaran Book on Investment Valuation, 2nd Edition398423 Words   |  1594 Pagesany mistakes - mathematical or grammatical - could you please let me know? It would help me ensure that the typos do not find their way into the final version. Chapter 1: Introduction to Valuation Chapter 2: Approaches to Valuation Chapter 3: Understanding Financial Statements Chapter 4: The Basics of Risk Chapter 5: Option Pricing Theory and Models Chapter 6: Market Efficiency: Theory and Models Chapter 7: Riskless Rates and Risk Premiums Chapter 8: Estimating Risk Parameters and Costs of FinancingRead MoreBhopal Gas Disaster84210 Words   |  337 Pagesget justice for the survivors as well as cleaning up of the hazardous waste. This compilation of selected news stories covering the last four years is a small effort to highlight this campaign as reported by the mainstream media. For an i n-depth understanding of the issues see www.indiaenvironmentportal.org.in/indepth/term/2542. A comprehensive collection of these up-to-date news clippings, research papers, lab studies, reports, documents, opinions and court judgments etc have now been made available