medium · Corporate Credit Analysis ratings
An arranger has 'Reverse Flexed' a deal by increasing the price to par (100). This means that for a $400 million loan, the borrower:
- Receives $396 million at closing but only has to repay $396 million at maturity
- Must pay an additional 1.0% arranger fee for the successful outcome of the flex
- Receives $404 million at closing due to the favorable price improvement
- Receives the full $400 million at closing and has no OID amortization expense
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