Glossary

A loan that is secured by a lien on an asset, however, the lien is second in priority to the proceeds of the asset.  In a liquidation scenario, the first lien lender must be paid in full before the second lien lender is paid.

A loan which is supported (secured) by collateral through a lien on certain or all assets of a borrower. All ABL facilities are secured loans.  

The pooling of financial instruments and the subsequent selling of the cash flows to investors in the form of a security.

A fee received (when required) by a creditor to secure a customer's agreement to complete a transaction (typically a loan).

A legal right a lender has over an asset or the assets of a company to secure the performance of a debt obligation. Asset based lenders typically have a security interest in all assets of their borrowers.

Senior Lender means each holder of a Senior Note. Senior Lenders can be separated by an inter-creditor agreement to determine which collateral belongs to which lender and who gets paid out first in an event of default.

“Senior Leverage Ratio” means, as of the date of determination, the ratio of (a) the Pari Passu Indebtedness of the Company and its Restricted Subsidiaries on such date, to (b) EBITDA of the Company and its Restricted Subsidiaries for the most recently ended four fiscal quarters ending immediately prior to such date for which internal financial statements are available. Total Leverage - combination of operating and financial leverage obtain total leverage. If a firm has a high amount of operating leverage and financial leverage, a small change in sales will lead to a large variability in EPS.

A credit facility that is senior secured is at the very top of the capital structure. It has priority over other  tranches of debt.