hard · Private Credit & Debt loan-structures-instruments
A borrower has a $50M Term Loan A at SOFR + 400 bps and a $200M Term Loan B at SOFR + 500 bps. An MFN clause exists on 'the Loans'.
If an incremental facility is issued at SOFR + 600 bps, what happens to the pricing of the TLA and TLB?
- Only the TLB increases to SOFR + 550 bps
- TLA increases by 50 bps; TLB increases by 50 bps
- Both increase to SOFR + 600 bps
- TLA increases to SOFR + 550 bps; TLB increases to SOFR + 550 bps
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