What is a payment waterfall?
A payment waterfall refers to the priority order in which interest, principal, fees and other payments are made from the cash flows […]
Understanding covenants in debt facilities
Debt facilities like loans and credit lines often come with strings attached in the form of covenants. Covenants are promises made by […]
What is a custodian?
In large commercial debt facilities, custodians play a critical behind-the-scenes role in keeping documentation and collateral secure. While retail bank customers may […]
What is a Borrowing Base Certificate?
A borrowing base certificate is a report that borrowers send to their lenders detailing the assets that are eligible to collateralize a […]
What are the common Stress Testing Scenarios?
Stress Testing Scenarios While the above portfolio metrics analyze historical performance, lenders also leverage stress testing which models hypothetical economic scenarios to […]
What is Reserve Amount in a Warehouse Facility?
A reserve amount in a warehouse lending facility refers to a portion of the loan proceeds that is held back by the […]
How to buid a loan tape?
A loan tape is an essential document that provides detailed data on the loans or other assets that are being used to […]
UCC Filings Explained
A UCC filing, also known as a UCC financing statement, is a legal form that creditors file to give notice that they […]
Special Purpose Vehicles Explained
A special purpose vehicle (SPV) is a legal entity created by a parent company to isolate financial risk. Companies typically use SPVs […]
What is backup servicing?
Backup servicing refers to when a backup servicer takes over the servicing responsibilities for a pool of loans or mortgages if the […]