Term loan B

A form of high yield loan that emerged in the early 1990s in contrast to the term loan A. It differs in from a term loan A in that it has a bullet rather than amortising maturity, and usually has a longer maturity. The investors in B term loans are mainly institutions rather than banks, making it the original class of “institutional” term loans by contrast with the “pro rata” term loan A and revolver. It was soon joined by other classes of term loans such as C and D, which have progressively longer maturities. All these term loans, however, rank equally in terms of seniority.