Glossary
Credit and risk
What is price talk?
The spread an underwriter markets a new loan at.
Set at commitment and tested at launch. Too tight wins the mandate and risks the book; too wide costs the sponsor and the next mandate.
A worked example
Banks launch a term loan with price talk of SOFR + 375 to 400bps at 99.5. Strong demand lets them tighten to SOFR + 350. Weak demand pushes it out to 425, or adds a bigger discount.
Where it catches you in the game
- The leveraged finance desk's price slider; talk plus OID is what investors compare to where paper clears.
It comes up most on the leveraged finance desk.
Related terms
Learn it by using it
Definitions stick once they've cost you money. Take a seat, make three calls a year and watch what price talk does to your returns.