Credit Sleeve

AAA

DEFINITION of 'Credit Sleeve'

A form of credit agreement, backed by physical assets, where the lending party will provide working capital and collateral to another company, known as the "sleeve provider". The lending party will essentially co-guarantee certain outstanding credit arrangements the sleeve provider has with other lenders and increase the overall credit quality of the sleeve provider.

INVESTOPEDIA EXPLAINS 'Credit Sleeve'

This type of working capital loan is most often found within the energy industry, where sleeves are backed by physical energy assets and carry certain cash flow requirements for the sleeve provider to continue to operate. Credit sleeves are often set up when a company has seen its credit quality decline and access to traditional forms of debt financing has run dry.

RELATED TERMS
  1. Working Capital

    This ratio indicates whether a company has enough short term ...
  2. Debt Financing

    When a firm raises money for working capital or capital expenditures ...
  3. Credit

    1. A contractual agreement in which a borrower receives something ...
  4. Cash Flow

    1. A revenue or expense stream that changes a cash account over ...
  5. Facility

    A formal financial assistance program offered by a lending institution ...
  6. Line Of Credit - LOC

    An arrangement between a financial institution, usually a bank, ...
RELATED FAQS
  1. What are the sources of funding available for companies?

    Despite all the differences among companies, there are only a few sources of funds available to all firms. 1. They make ... Read Full Answer >>
  2. Is the high cost of installing solar panels justified by the money saved by going ...

    In favorable locations and under suitable conditions, homeowners can recuperate the cost of installing solar panels. The ... Read Full Answer >>
  3. If my home runs power off the grid, what is the specific environmental impact?

    Running a solar-powered home with energy that is natural or off the grid has several environmental benefits. By using solar ... Read Full Answer >>
  4. What businesses would benefit from more people going off the energy grid?

    Companies that stand to benefit from a shift to off-the-grid living include those that sell alternative energy materials, ... Read Full Answer >>
  5. How can I make my home run on energy that is 100% off the grid?

    Taking your home off the grid can be an exciting process that results in money saved annually and a sense of accomplishment ... Read Full Answer >>
  6. How do business ethics differ from industry to industry?

    The system of moral and ethical beliefs that guides the values, behaviors and decisions of a business organization and the ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Will Corporate Debt Drag Your Stock Down?

    Borrowed funds can mean a leg up for companies or the boot for investors. Find out how to tell the difference.
  2. Investing Basics

    What Is A Corporate Credit Rating?

    Is the bond you're buying investment grade, or just junk? Find out how to check the score.
  3. Entrepreneurship

    How To Profit From Solar Energy

    Once regarded as too expensive and inefficient, solar energy is now becoming a more viable option for consumers and businesses alike.
  4. Entrepreneurship

    New Battery Technology Investment Opportunities

    With the advent of mobile computing and electric cars, the importance of batteries for electrical power will continue to grow.
  5. Investing Basics

    Getting To Grips With Energy Markets

    The wholesale energy market is quite different from traditional financial markets and potential trader need to thoroughly understand the nuances.
  6. Investing

    Pockets Of Value In The Stock Market

    U.S. stocks benefited from signs the Fed’s path toward higher interest rates, as well as from continued merger-and-acquisition activity on of low rates.
  7. Economics

    Ending The Limits On U.S. Crude Oil Exports

    As US storage capacity reaches its limit, industry participants and their lobby groups in Washington are calling for an end to the crude oil exports ban.
  8. Investing News

    Green Technology: A Solid Investment Choice?

    With global investing in green energy on the rise, there are abundant opportunities for environmentally responsible, financially sound investments.
  9. Active Trading Fundamentals

    Where And How To Trade Energy Stocks

    Energy futures set a high bar to entry for individual traders and investors, redirecting exposure into sector equities and exchange-traded funds.
  10. Professionals

    Is it Safe to Invest in MLPs Again?

    The best bet right now for investors seeking to play a rebound in the price of oil may very well be ETFs that invest in energy MLPs.

You May Also Like

Hot Definitions
  1. Fisher Effect

    An economic theory proposed by economist Irving Fisher that describes the relationship between inflation and both real and ...
  2. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  3. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  4. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  5. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  6. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center