Credit memo
A credit memo is the underwriting document that summarizes a borrower, the proposed facility, the analysis, the risks, and the recommendation for the credit committee or investment committee. In private credit it is often called the investment memo. It is the artifact the decision is made on, and the record of why.
What a credit memo contains
- The borrower, the sponsor or guarantor, and the purpose of the facility.
- Spread financials and the key metrics: leverage, DSCR, debt yield, liquidity, and trends.
- The collateral and structure, including covenants and conditions.
- Risks and mitigants, stress cases, and the recommendation.
Why it takes so long
Most of the effort is assembly: pulling spread figures, ratios, and commentary into a consistent document. When the underlying numbers change, the memo has to be reworked. That assembly is exactly the kind of work that should be generated, not typed.
How VisibleSignal drafts the credit memo
VisibleSignal generates a first-draft memo from the spread figures and source documents, in your template and to your credit policy, with every number linked back to where it came from. The analyst spends their time on judgment and narrative rather than formatting and re-keying, and the committee gets a consistent document every time.
See also: financial spreading, global cash flow analysis, covenant monitoring.
