Quote:
Originally Posted by The Cobra
You made the comment that unsecured debt is not leverage and that is 100% incorrect.
Companies that are able to borrower on large unsecured lines are able to do so because they have huge asset holdings which have no security against them . And you'd expect that those companies would have many covenants that restrict their borrowings and giving security.
Your comment above even proves that by saying "usually". Which means that leveraged loans can be unsecured.
I believe you've been "lawyered" by a layman.
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We were talking about "leveraging assets". Thius almost always means using assets as collateral.
No one in the lending business calls unsecured loans leveraged loans. Eg:
The industry defines leveraged loans as secured loans where the borrower is sub-investment-grade or the spread at issuance is higher than a certain threshold.
https://www.ecb.europa.eu/pub/financ...x201805_05.pdf
Keep swinging though.
EDIT: On second thought, don't - this is a thread derail and I'm not participating any more.