Term Loan A / B
Corporate Credit Analysis glossary · Corporate Credit Analysis
Definition
TLA is amortising, bank-held, and typically prices tighter than TLB; TLB is minimally amortising, institutionally-held (CLOs, prime funds), and prices wider with more flexibility on terms.
Term Loan A / B in plain English
Term Loan A and Term Loan B are two flavors of the same big corporate loan, split up because different lenders want different things. TLA is usually held by banks, gets paid down steadily over its life ("amortising" just means chipping away at the balance regularly), and charges a lower interest rate. TLB is held by investment funds that prefer to keep their money working — so it barely gets paid down until the end, comes with looser rules for the borrower, and charges a higher rate to make up for that. Same company, same loan pool, just tailored to two kinds of lenders.
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