Floating rate note meaning

This Practice Note looks at Term Loan B (TLB) facilities, which often feature as a senior tranche within syndicated loans in leveraged financings. TLBs are long-established in the US market and are increasingly seen in the European lending market for institutional investors. It examines the structure of a typical TLB and how it diverges from traditional European leveraged loans, before setting out the key features. This Practice Note assumes some understanding of leveraged finance. For introductory information, see: Introductory guide to acquisition finance. For explanations of common terms, see Practice Note: Glossary of acquisition finance terms and jargon. What is a Term Loan B? In lending markets, ‘Term Loan B’ or ‘TLB’ (short for Term Loan Bullet) describes a tranche of senior secured credit facilities made available to a borrower and intended to be syndicated in the institutional loan market. They are usually floating-rate term facilities with an actual or implied non-investment grade rating, a five to seven year maturity and either nominal amortisation of 1% per annum...

ARCHIVED: This Practice Note has been archived and is not maintained In brief, a market disruption clause explains how loan interest is determined when a lender’s funding costs exceed the London Interbank Offered Rate (LIBOR) or another nominated benchmark—often arising when the financial system is under strain, causing markets to seize up, or when the particular lender faces solvency issues. Either scenario is liable to increase the lender’s cost of funds. These clauses are typically found in facility agreements where interest is set by reference to a floating rate such as LIBOR or the Euro Interbank Offered Rate (EURIBOR). This Practice Note considers market disruption provisions in the setting of LIBOR-based syndicated facilities. Similar considerations apply to syndicated facilities that calculate interest by reference to EURIBOR and other benchmark rates. The ongoing move away from LIBOR to risk‑free rates, including SONIA, will have an impact on the drafting of market disruption provisions. For further detail, see Practice Notes: LIBOR transition and Interest provisions in (LIBOR-based) Loan Market Association (LMA)...

Definitions The terms and conditions (T&Cs) for the notes (the Notes) appear within the Prospectus and, for every form of securitisation, also as a Schedule to the Trust Deed itself. This Practice Note outlines what is set out in those T&Cs. Usually, the T&Cs relate to the Notes solely in global form and indicate that, in certain narrow situations, definitive Notes might on occasion be issued. In those instances, the T&Cs will be revised as required. This method removes the need to address definitive Notes, Coupons and Talons within the T&Cs, the Trust Deed or the Master Definitions Schedule across the documentation suite. Previously, aspects of the T&Cs were shaped on the assumption that Noteholders would trade definitive Notes bearing the T&Cs on the reverse, and a potential purchaser needed clarity in full about exactly what was being acquired—hence the inclusion of material such as a summary of the Trust Deed’s meeting provisions and descriptions of the trustee’s various powers, including the ability to modify terms and to...