Build the all-in yield on a floating-rate direct loan — what are the components?

How to answer

All-in yield = the base rate plus the credit spread, plus the amortized OID, plus fees, plus any pickup from a SOFR floor. The base is Term SOFR (it replaced LIBOR), and the spread is the margin negotiated off credit quality and leverage. OID is the discount to par at issue — sold at 98 means 2 points — which you amortize over the loan's expected life to convert into incremental yield. Upfront and commitment fees add a bit more, and a SOFR floor protects yield if base rates fall. That's why lenders like the floating-rate-plus-OID-plus-fees structure: it stacks several yield sources.

Key idea: SOFR + spread + amortized OID + fees + floor pickup.