The Street Diligence Instrument Score Analysis is our enhanced ranking system that offers end users the ability to measure the strength of their documents against other documents, their portfolio, and the competitive landscape (consortium). It can be used to provide a clear indicator of whether the document's terms are more favorable to a certain party in the transaction. You can find this analysis on the Summary & Reference Data tab after clicking on a document within the platform.
The scores range from the numbers 0 to 10. The higher the score is, the more favorable that document is to Party A. However, if the score shows a lower number it would be more favorable to Party B. An example of this would be when referring to a Credit Agreement, Party A is the Lender and Party B is the Borrower.
The Instrument Score Analysis is calculated by averaging the pool of tags that we have measured holistically.
Each document will receive three scores:
Document Score
Company Submission Score
Competitive Landscape Score
Document Score
The document score is the weighted average of all Metric Scores, which is the numerical value attached to each particular term or tag captured in the document.
The way that we determine our Metric Scores is by creating an internal reference portfolio. This contains ideal agreements that are generated by our experts here at Street Diligence. When we receive a new document from a client, each metric or tag value is compared to this reference portfolio in order to populate what we then call our Metric Score.
Note: In the example at the top, the document in question received a score of 2.4/10 which indicates a more borrower-friendly deal.
Company Submission Score
The company submissions score is a great way for end users to gain insight into how a specific document (or instrument) compares to everything in their portfolio. This number is calculated by taking the average Document Score of each related document uploaded by Street Diligence users within the company. If you looking at a US Credit Agreement, this number will only show you the average of all other US Credit Agreements uploaded by your company.
For public documents, you will see a N/A for this field as this is only relevant for company-submitted documents.
Note: In the example at the top, the company submission score received a 4.9/10 which indicates a neutral stance against other company-submitted documents.
Competitive Landscape Score
The last score you will see for the instrument score analysis is the competitive landscape score. This number will only appear if your company is subscribed to our consortium. The consortium is a pool of aggregated, anonymized private loan data. This is a great way to gauge where the deal sits within the competitive landscape compared to similar deals submitted to Street Diligence. Similar to the Company Submission score, the Competitive Landscape score will only show the average score of documents within the Credit Consortium similar to the document in view.
Note: In the example at the top, the competitive landscape score received a 4.7/10 which indicated a neutral stance against the data within the consortium.
Frequently Asked Questions:
What if we don't subscribe to the consortium?
If your company hasn't opted into the consortium and you would like to hear more about this, please email sales@streetdiligence.com.
Where else can I find the scores besides the Document Page?
The scores are integrated into various places on the platform beside the Document Page. They are available in a column in your individual and company Portfolios, on the Navigator Page, and in every Excel sheet that is exported from the platform.
How can this be used?
Each aspect of the score has a slightly different value added to your workflow. The Document Score is a great way to quickly gauge if your document and the terms within it are more favorable to one party in a transaction. The Company Submissions provides insight into how your Company's documents usually perform or rank, and where this instrument sits with respect to that competitive set. Lastly, the Competitive Landscape is useful when wanting to take a deeper look at how your submissions measure up to similar documents that have been processed by us. Ultimately, all of these scores serve as additional information that our users can add to their artillery when evaluating and weighing deal options.
How are the Metric Scores populated?
Each metric score is designed to combine the existence and the value of a given term. For example, from a lender's point of view, they would prefer a restricted payments basket to be as small as possible. However, the lender would prefer it even more if the basket did not exist. The metric score seeks to reflect this intuition in a single number.
As an example, imagine a deal that had a very small general restricted payments basket, such as 1% of EBITDA. This value is smaller (more lender-favorable) than pretty much any other value we see. However, if 70% of deals do not contain any general restricted payments basket, this small basket is still worse than those 70% of deals. Therefore, this term would be scored in approximately the 70th percentile, which corresponds to a metric score of 3 out of 10.