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