Track 19 of 25

Finding real advance rates

How per-position advance rates are derived, why the blended number hides the concentrated one, and how to build the schedule from the documents.

25 lessons

Mark a lesson complete and it is remembered here.

Why a blended advance rate is a weighted average, not a typical rateFifty-four percent is nobody's row. It is five rows arguing inside one division.6 min
Reconstructing blended from the five Halden & Wren rowsFive products and one division rebuild the collateral figure. Nothing else is required.6 min
Why the blended number hides CalderA third of the wealth is a fifth of the collateral, and the average has no room to say so.6 min
Why the blended number also hides the government fundThe quiet row is a sixth of the wealth and a quarter of the collateral, which is the same trick run the other way.6 min
Building the schedule from the documents you haveThe schedule is a lookup table. The statement is only the list you run through it.6 min
When the schedule is not in the statementA missing column is still a number. It lives in the agreement, not in the month's snapshot.7 min
Per-name lending value is market value times the advance rateEvery lending-value cell is a product. No second term enters it.6 min
Haircut as the complementThe withheld fraction is the same fact as the advanced fraction, read from the other end of the row.6 min
Two names, same market value, different lending valueSeventeen hundred dollars of wealth and a quarter of a million of collateral sit in the gap between two neighbours.6 min
Concentration: Calder as a share of market versus of lending valueThe concentrated name shrinks when you change the denominator, which is how a schedule hides its own discount.7 min
Why capacity is the sum of lending values, not a percent of the totalThe percent is a summary of a sum that already exists. It cannot stand in for the sum.6 min
A stated facility limit sitting below the sum of lending valuesEight hundred and seventy-seven thousand of unused lending value does not open one extra dollar of the line.6 min
What happens to blended when Calder falls and the fund does notA falling low-advance name improves the average and shrinks the collateral at the same time.6 min
Reclassification of one rowZeroing Calder removes six hundred and forty-four thousand of lending value and does not touch the stated line.6 min
An eligibility floor that zeroes a rowA price test does not haircut Oakridge. It deletes the product, which is a different operation.6 min
Preferred stock versus common — Oakridge against MeridianFifty-five cents on the preferred dollar and fifty on the common dollar are a ranking of exit, not of the issuer.6 min
Collective advance rates versus single-nameThe same equity dollar is seventy cents in a pool and thirty-five cents in Calder, because the exits are not the same dollar.6 min
Why adding a high-advance holding raises blended and may not raise capacityA better average on a number already larger than the limit does not move the limit.6 min
Reconstructing last month's schedule from two statementsThe second statement is a second photograph of the same table. Subtract, and the month appears.7 min
A concentration limit that binds on Meridian plus CalderTwo names already occupy three-fifths of the account, so a fifty-percent cap has already been spent.6 min
The schedule the agreement describes versus the schedule appliedThe published row is a ceiling. The applied row is what survived every other rule.6 min
Building a working sheet from the March statementThe working sheet is the statement with the missing column filled in, then added, then compared with the limit.6 min
Stressing one advance rate and watching blended moveThirteen points on Meridian move the average by four, because that row is already a third of the account.6 min
The lowest blended advance that still supports the loanThe loan already is 30.81 percent of the market. That figure is an LTV wearing an advance rate's clothes.7 min
Why the schedule is recomputed every monthLast month's 54.32 percent is a photograph. The next close takes another, even if nobody rewrites a rate.7 min

Educational only. Nothing in this track is investment, legal or tax advice, or a recommendation to enter into any transaction. Completion is stored in this browser and nowhere else.