easy · Private Credit loan-structures-instruments
A private credit fund manages a senior secured loan to a mid-market healthcare company. To determine the fair value of this loan for its quarterly report, the fund uses an internal model that discounts expected future cash flows. The model utilizes unobservable inputs, including an internal credit rating and a synthetic spread derived from historical sector default data.
According to the ASC 820 framework, how should this asset be classified?
- Level 1
- Level 2
- Level 3
- Level 4
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