Definition of Term loan A, called “TLA”

Term loan A, called “TLA”, are commonly referred to as amortizing term loan because it typically require substantial principal repayment throughout the life of the loan. Term loans with significant annual required amortizations are perceived by lenders as less risky than those with a looser repayment schedule. Consequently, term loan A’s are often the lowest priced term loans in the capital structure. Term loan A’s are syndicated to commercial banks and finance companies together with the revolver and are often referred to as “pro rata” tranches because lenders typically commit to equal percentages of the revolver and term loan A during syndication. Term loan A’s in the LBO financing structure often have a term that ends simultaneously with the revolver.