Seasoning
Corporate Credit Analysis glossary · Corporate Credit Analysis
Definition
The age of a loan or bond since origination; seasoned credits have observable performance history that aids underwriting and pricing, whereas newly originated exposures rely on prospective analysis.
Seasoning in plain English
Seasoning just means how long a loan or bond has been alive since the day it was issued. A brand-new loan has no track record — you can only guess whether the borrower will pay, based on forecasts. A 'seasoned' loan has months or years of actual on-time (or late) payments you can look at, which makes it far easier to judge and price fairly. It's like the difference between hiring someone straight out of school versus someone you've watched do the job for three years — the second one is much easier to trust because you've seen the receipts.
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