It is used to finance large investments and acquisitions, with arranger and agent bank roles. It typically includes financial covenants and regular reporting obligations.
Related terms
Financial covenantsObligations in loan agreements requiring the borrower to maintain certain financial ratios (such as net debt/EBITDA or debt service coverage).RefinancingRepaying existing debt with new financing, usually on more favourable terms.LeverageThe extent to which a company uses debt to finance its assets or investments.BetaA coefficient measuring the sensitivity of a share's return to changes in the market return, that is, its systematic risk.Break-even pointThe sales volume or amount at which total revenue equals total cost and the business makes neither profit nor loss.Capital asset pricing model (CAPM)A model that calculates the cost of equity from the risk-free rate, beta and the market risk premium.
Last updated: October 31, 2026 · This definition is for general information only.