Loan Types
Term Loan
Drawdown is made in one or more advances (depending on financing need) within a pre-determined period of time after signing of the Facility Agreement. Repayment occurs in one amount (bullet) or according to a fixed repayment schedule. Repaid amounts may not be redrawn.
Revolving Credit
During the entire lifetime of the loan, the Borrower may draw, repay and redraw part or all of the Facility according to his funding need.
Back-up Line
Facility which acts as a buffer, e.g. for a Commercial Paper- or MTN-Program. The existence of a Back-up Line is usually a prerequisite to having the program rated by a rating agency. The Back-up Line is only drawn upon when the Borrower is unable to use the CP of MTN facility (e.g. due to insufficient liquidity in these markets).
Guarantee Facility
Irrevocable and unconditional promise of a payment or performance, irrespective of the validity of the underlying obligation. Guarantee Facilities are often used in conjunction with an acquisition or an export finance transaction.
Combination of different Facility Types
E.g. in Acquisition Finance (LBOs and MBOs), Project Finance, Asset Backed Transactions, or a combination of bond and loan instruments