Lesson 2 of 25 · 6 min

Apply a 19 percent market-wide decline to the March statement

Every row is multiplied by 0.81, the blend does not move, and lending-value LTV prints as 70.01 percent.

Sample statement · fictional

Halden & Wren Private Credit

Securities-backed demand facility

This document is fictional. The institution, the account, the positions and every figure were invented so the arithmetic can be checked by hand.

Client: Northreed Holdings LLC
Account: HW-7721-4408-19
Facility: HW-SB-44107
Period: 1 March 2026 – 31 March 2026
Statement date: 2 April 2026
Day count: Act/360

Rate schedule

Index: one-month term funding rate
Spread: 1.85%
Index, 1–11 March: 5.12%
Reset: 12 March 2026
Index, 12–31 March: 5.37%
Stated rate, first 11 days: 6.97%
Stated rate, last 20 days: 7.22%

Balance

Opening drawn balance: $1,847,220.00
Draws / repayments: $0.00
Interest, 1–11 March: $3,934.07
Interest, 12–31 March: $7,409.40
Interest charged: $11,343.47
Closing drawn balance: $1,858,563.47
Facility limit: $2,400,000.00
Undrawn at open: $552,780.00

Positions at 31 March close

Name	Units	Price	Market	Advance	Lending
Meridian Industrial common	12,400	$148.25	$1,838,300.00	50%	$919,150.00
Calder Growth common	3,100	$593.55	$1,840,005.00	35%	$644,001.75
Broad-market equity collective	4,150	$214.80	$891,420.00	70%	$623,994.00
Oakridge Utility preferred	8,200	$62.40	$511,680.00	55%	$281,424.00
Short-duration government fund	18,600	$51.15	$951,390.00	85%	$808,681.50

Total market value: $6,032,795.00
Total lending value: $3,277,251.25
Blended advance rate: 54.32%
LTV on market value, at close: 30.81%
Maintenance threshold: 70% of market value

The statement above is the unstressed book. A 19 percent decline on every row means each market value, and each lending value, is multiplied by 0.81. Advance rates stay where the March schedule put them. The balance stays at $1,858,563.47. The threshold stays at 70 percent of market value.

Market value after the move is $6,032,795 × 0.81 = $4,886,563.95. Lending value is $3,277,251.25 × 0.81 = $2,654,573.52. Because every row was scaled by the same factor, the blended advance rate is unchanged: $2,654,573.52 ÷ $4,886,563.95 = 54.32 percent, the same ratio the March close printed.

Market LTV is $1,858,563.47 ÷ $4,886,563.95 = 38.03 percent. The trigger is still $2,655,090.67. Headroom is $4,886,563.95 − $2,655,090.67 = $2,231,473.28, which is 45.67 percent of the stressed book. The shortfall is $0: market value still sits above the trigger.

Lending-value LTV is a different story. $1,858,563.47 ÷ $2,654,573.52 = 70.01 percent. Against a 70 percent test written on lending value, the same afternoon that still has 45.67 percent of market-value headroom has already arrived at the line. The $517.15 by which lending value sits under $2,655,090.67 is the whole of that arrival.

A uniform price move scales both sides of the blend by the same factor. The blend is silent. The two LTV bases are not.

Key terms

Uniform decline: The same percentage applied to every pledged row. It scales market value and lending value by one factor and leaves the blended advance rate unchanged.
Stressed market value: The sum of the rows after each has been repriced. After a 19 percent decline on this book it is $4,886,563.95.
Shortfall: The amount by which collateral value sits below the trigger. Zero when the test still passes.

Worked example

Nineteen percent off the March close

Every row multiplied by 0.81. Balance $1,858,563.47. Threshold 70 percent of market value.

Stressed market value: $4,886,563.95
Stressed lending value: $2,654,573.52
Market LTV: 38.03%
Headroom: 45.67%
Lending-value LTV: 70.01%
Shortfall on the market-value test: $0

The market-value test still has $2,231,473.28 of room. The lending-value test is already at seventy percent, off by $517.15.

Check yourself

After a 19 percent decline on every March row, market value is $4,886,563.95 and lending value is $2,654,573.52. What is LTV on each basis, and which test is closer to 70 percent?

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Educational only. Nothing in this lesson is investment, legal or tax advice, or a recommendation to enter into any transaction. Figures are illustrative and computed from the inputs stated in the lesson.