Leveraged Finance & Credit
What does 'SOFR + 400' mean and how does a floating-rate loan price?
Model answer
It means the loan pays the SOFR benchmark rate plus a 400 basis point (4.00%) credit spread, reset periodically (e.g., every 1–3 months). So if SOFR is 5.0%, the all-in coupon is ~9.0%; if SOFR falls…
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