Glossary

Liens attached to the assets (typically perishable, ie from a "grower") of the Borrower for which payment has not been made to the vendor.

Arrangement under which a manufacturer or supplier takes back the goods that remain unsold after a specified period. Similar to a consignment sale.

Three-party contingent liability agreement under which a third-party or parties (the "Guarantor" or "Guarantors") agree to be directly or collaterally responsible for the obligation (ABL loan) of a first-party (the Borrower) to a second-party (Lender) in case the first-party defaults or fails to fulfill its part of a deal. Guaranties are typically provided by non-borrowers (Parents, Subsidiaries, Individual Owners) in ABL Facilities.

In lending, a Haircut generally means the difference between the value of a loan and the value of the collateral securing the loan. More generally it is a term used for a variety of spreads and margins.

A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security, such as a futures contract.

A high yield term loan is a debt product that functions much like mezzanine or subordinated debt, but can have a 1st priority security interest in certain assets like equipment or intangibles. 

To pledge property as security or collateral for a debt. Typically, neither the possession nor the title but only the right to sell an asset or property passes on to the creditor or lender (called a grantee).

The International Swaps and Derivatives Association. An organization for those who participate in the market of over-the-counter derivatives.