Hoping someone could shed some light on this topic. When a quote is received in commercial lending with the terms below, could someone ELI5:
5 Year Term
30 Year Amortization (No IO)
Rate: 175 bps over the Average Life
The mechanics behind average life?
The reasoning for using it vs treasuries or swaps?
Who really quotes bps over Average Life? (Life Co, Funds, ect)