Upfront Fees and Original-Issue Discount: The Lender's Real Yield
This lesson is part of the course
In this lesson
You compute the net cash a lender pays out after an original-issue discount and an upfront fee, build the loan's quarterly cash flows and find the lender's IRR and yearly yield compared with the headline coupon.
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Lessons in this course
- Floating-Rate Cash Interest: Base Rate, Margin and Floor Locked
- Upfront Fees and Original-Issue Discount: The Lender's Real Yield Locked
- PIK Interest: Interest Paid in Kind and a Growing Balance Locked
- Delayed-Draw Tranches: Commitment Fees and Blended Yield Locked
- Call Protection: Prepayment Premiums and Yield if Repaid Early Locked
- Unitranche Splits: First-Out and Last-Out Pricing Locked
- Credit Losses: Expected Loss and the Yield after a Default Locked
- Deal Comparison Dashboard: Yield, Cash Yield, PIK and Losses Locked