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A spread is used by some participants cut-off. As an example, any loan having a spread of at the least LIBOR+125, or even LIBOR+150, would qualify as вЂњleveraged.вЂќ
Other people utilize rating requirements: any loan rated BB+ or lower would qualify.
But exactly what of loans which are not rated?
At LCD we now have developed a far more complex meaning. We consist of that loan within the universe that is leveraged:
it really is ranked BB+ or lower orit isn't ranked or ranked вЂBBB-вЂ or more but has
(1) a spread of LIBOR +125 or more and(2) is guaranteed by an initial or 2nd lien
A loan rated BB+ that has a spread of LIBOR+75 would qualify as leveraged, but a nonrated loan with the same spread would not under this definition.
It really is hardly a perfect definition, but one which LCD thinks most readily useful captures the character of loan market individuals once they speak about вЂњleveraged loans.вЂќ