hard · Asset-Backed Securities
A revolving trade receivables facility has a 'dilution' trigger.
What does dilution typically refer to in this context?
- The issuance of new subordinate bonds that dilute the senior's claim.
- A decrease in the interest rate charged to corporate customers.
- The addition of too many new receivables to the pool.
- Non-cash reductions in the receivable balance, such as product returns or volume discounts.
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