Private Credit Glossary: Key Terms and Definitions
- Black-Cox Model
- Cash Sweep
- Covenant-Lite
- Intercreditor Agreement (ICA)
- Illiquidity Premium
- J-Curve
- London Interbank Offered Rate (LIBOR)
- Maintenance Covenant
- Non-Sponsored Lending
- Original Issue Discount (OID) Spread
- Perpetual BDC
- Post-Money
- Probability of Default (PD)
- Residual Value to Paid-In Capital (RVPI)
- Secondary Buyout
- Sponsor
- Unitranche
- Interest Coverage (IC) Test
- Debtor-in-Possession (DIP) Financing
- Adjusted Present Value (APV)
- Business Development Company (BDC)
- Capital Asset Pricing Model (CAPM)
- Catch-Up
- Clawback
- Distributed to Paid-In Capital (DPI)
- Fee Drag
- Full Ratchet
- General Partner (GP)
- Incurrence Covenant
- Loan Origination
- Management Fee
- Nonaccrual
- Preferred Shares
- Revolver (Revolving Credit Facility)
- Sale-Leaseback
- Senior Stretch
- Secured Overnight Financing Rate (SOFR)
- Soft-Call Protection
- Springing Covenant
- Term SOFR
- Weighted Average Ratchet
- Last-Out Tranche
- Anti-dilution
- Beta
- Credit Spread
- Down Round
- Fair Value
- First Lien
- Interval Fund
- Leveraged Buyout (LBO)
- Most-Favored-Nation (MFN) Protection
- Net Debt
- Risk Premium
- Step-Up
- Terminal Value
- Total Value to Paid-In Capital (TVPI)
- Add-On Acquisition
- American Waterfall
- Bridge Loan
- Default
- European Waterfall
- Hard-Call Protection
- Mezzanine Debt
- Multiple on Invested Capital (MOIC)
- Net Asset Value (NAV) Loan
- Original Issue Discount (OID)
- Preferred Return
- Public BDC
- Recovery Rate
- Serial Correlation
- Net Investment Income (NII)
- Agreement Among Lenders (AAL)
- First-Out Tranche
- Debt Yield
- Accounting Standards Codification (ASC) 820
- Cov-Lite TLB
- Equity Kicker
- Loss-Given-Default (LGD)
- Limited Partner (LP)
- Make-Whole Premium
- Net Asset Value (NAV)
- Non-Traded BDC
- Pre-Money
- Sponsor-Backed Deal
- Subscription Line
- Watchlist
- Regulated Investment Company (RIC)
- Overcollateralization (OC) Test
- Accordion Feature
- Adjusted EBITDA
- Amortisation
- AUM (Assets Under Management)
- Broadly Syndicated Loan (BSL)
- Capital Call
- Carried Interest
- CCC (Cash Conversion Cycle)
- Collateralized Loan Obligation (CLO)
- Delayed Draw Loan
- Direct Lending Fund
- Down-and-In Option
- Drag-Along
- Enterprise Value
- Gordon Model
- Impairment
- Initial Public Offering (IPO)
- LPA (Limited Partnership Agreement)
- Middle Market
- Net Operating Profit After Tax (NOPAT)
- Side Letter
- Stretch Senior
- Tranche
- Weighted Average Cost of Capital (WACC)
- Yield to Takeout
- Yield to Maturity (YTM)
- Business Development Company (BDC) Asset Coverage Ratio
- Middle Market CLO (MM CLO)
- All-In Yield
- Bullet
- Cap Table
- Covenant
- Current Yield
- Discounted Cash Flow (DCF)
- Direct Lending
- Distribution Waterfall
- Dry Powder
- Debt Service Coverage Ratio (DSCR)
- Equity Contribution
- Euro Interbank Offered Rate (EURIBOR)
- Expected Loss (EL)
- Free Cash Flow to the Firm (FCFF)
- Internal Rate of Return (IRR)
- Non-Investment Grade
- Payment-in-Kind (PIK)
- Small Business Investment Company (SBIC)
- Sterling Overnight Index Average (SONIA)
- Tag-Along
- Warrant
- Equity Cure
- Alpha
- Commitment Fee
- Dividend Recap
- Duration
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
- Floating Rate
- Global Financial Crisis (GFC)
- Hurdle Rate
- Level 3 Asset
- Leverage Ratio
- Loan-to-Cost (LTC)
- Pull-to-Par
- Second Lien
- Senior Secured Loan
- Sharpe Ratio
- Vintage Diversification
- Vintage Year
- Workout
- Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) Quality Add-Backs
- Monitoring Portfolio Surveillance
- Asset Based Specialty
- Loan Structures Instruments
- Fees Fund Economics
- Financial Covenants
- Incurrence Cov Lite Protections
- Fund Returns IRR
- Collateral Security Intercreditor
- Fund Structures Returns Economics
- Capital Calls Liquidity
- Business Development Company (BDC) Vehicle Structures
- Leverage Cash Flow Metrics
- Workouts Restructuring Defaults
- Due Diligence Risk Assessment
- Pricing Terms Economics
- Documentation Covenants Terms
- Recovery Loss Mitigation
- Market Structure Competition
- Portfolio Management Monitoring Workouts
- Underwriting Credit Analysis
- Sponsor PE Dynamics
- Deal Sourcing Origination