Rising Tides Lifts All Boats, Including Debt Costs

November 28, 2022

They say a rising tide lifts all boats.  Well, the interest tide is still coming in as the Fed continues to fight what seems like a never ending inflation battle.  Many companies and organizations are faced with floating rate debt or bonds that need refinanced from their original issuance at historically low rates.  While rates today are back to historical averages, it does not look or feel like they will remain that way for long.

If you believe this rising rate environment will persist and have floating rate debt and/or need credit in the near future, you are probably looking to refinance or lock in the best interest rate possible.  Over the next few weeks, we will review the key documents that a company or organization will encounter as it borrows money or refinances/issues debt.  Below is a rundown of the topics:

  • Commitment Letter / Term Sheet – this is the letter from the lender to the borrower outlining the key terms and conditions of the loan (sometimes its also called a term sheet)
  • Loan Agreement – this is the main lending document that sets out the terms of the loan, the borrowing and repayment process, obligations of the lender and borrower and events of default
  • Promissory Note – this item documents the borrower’s obligations under the loan agreement
  • Guaranty & Collateral Documents – these are the additional promises made by the borrower and/or related parties to repay the loan or debt; there are also security agreements which outline the lenders position on the borrower’s assets (e.g., UCC, DACA, Perfection Certificates, etc.)
  • Other Documents – these documents can include a resolution approving the loan package, opinion of counsel, flow of funds, solvency certificates and so on.

Navigating the rising interest rate environment with an experienced commercial lender, investment banker, business attorney and/or a business financial advisor will pay dividends in the long run.

A few things that may be of interest: 

As always, please don’t hesitate to email myself (, Andy Miller (, Christian Miller (, Erik Spurlin (, Brad Leber ( or anyone in our office with questions or comments.  

Please see all of our prior updates at this link or if you would like to be added to our email list, please click here.  


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