Term Loan B facilities
Produced in partnership with Carlo de Vito Piscicelli of Cleary Gottlieb Steen & Hamilton
Term Loan B facilities

The following Banking & Finance practice note Produced in partnership with Carlo de Vito Piscicelli of Cleary Gottlieb Steen & Hamilton provides comprehensive and up to date legal information covering:

  • Term Loan B facilities
  • What is a Term Loan B?
  • How do TLBs differ from traditional European senior secured facilities?
  • Typical structure of a TLB facility agreement
  • Definitions
  • The Credits
  • Representations and warranties
  • Affirmative covenants
  • Negative covenants
  • Events of Default
  • More...

This Practice Note discusses Term Loan B (TLB) facilities which frequently appear as a tranche of senior facilities in syndicated loans in leveraged financings. TLBs are an established feature in the US market and increasingly used in the European lending market for institutional investors.

This Practice Note explores the structure of a typical TLB facility and how it differs from that of traditional leveraged loans in Europe before looking at its key features.

This Practice Note assumes some knowledge of leveraged finance. For introductory information, see: Acquisition finance—introductory guide. For an explanation of common terms, see Practice Note: Glossary of acquisition finance terms and jargon.

What is a Term Loan B?

The term 'Term Loan B' or 'TLB' is used in the lending market to refer to a tranche of senior secured credit facilities made available to a borrower that is designed to be syndicated in the institutional loan market. These are typically floating-rate term facilities with an actual or implied non-investment grade rating, a maturity of five to seven years and a nominal (1% per year) or no amortisation, with the remaining principal due in a bullet repayment at maturity.

The interest, maturity and amortisation profile of TLB facilities are designed to suit the needs of institutional investors, who seek a higher yield and longer term investment than traditional bank lenders.

TLB facilities are often accompanied by a revolving

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