Terming out is not free: what slower placement markets cost lenders
When note programmes take two quarters longer to place, the cost lands on the balance sheet first and on borrowers second.
Adrian Halloway
Partner, Structured Credit
Structured credit in brief
Part of our Structured credit series, this 6 min note is written by Adrian Halloway, Partner, Structured Credit, and sets out what the desk is seeing, followed by the three points we would watch before signing.
- Series
- Structured credit
- Published
- 24 June 2026
- Author
- Adrian Halloway · Partner, Structured Credit
- Reading time
- 6 min
The logic of warehousing is simple: write the facility, hold it, refinance it into a note programme once the pool is diversified. The risk is equally simple. If placement slows, the lender is funding five-year assets with something shorter and more expensive.
Institutional demand for mid-market credit has not disappeared, but the diligence has lengthened. Noteholders now ask for loan-level data, servicing history and a stress case, all of which take time to produce and time to read. A programme that closed in eight weeks in 2022 can take five months.
Lenders respond in one of three ways: they price the warehousing cost into new facilities, they slow origination, or they widen the pool criteria to place faster. The third option is the one that damages portfolios, because it happens quietly.
Our answer has been to keep programme sizes below what the market can absorb in a quarter and to hold the pool criteria fixed regardless of placement conditions. It costs us origination volume in strong markets and protects the book in weak ones.