Do people investing in credit (leveraged loans / high yield) that want to compare different industries / different valued businesses ever look at spread per turn of LTV (or the inverse, 1/LTV = asset coverage)? Was wondering what convention makes most sense intuitively and also most sense to easily benchmark ideas if you have a bunch of credits with different yield profiles / leverage / FCF profiles and LTVs. Basically asking does Spread per Point of LTV make sense or does it sound like nonsense (I don't particularly like that the output number is really high). Same question with Spread per % FCF yield.
I'm familiar with spread per turn of leverage (i.e. 15% yield for 5x leverage = 300bp per turn of leverage) but trying to also incorporate the LTV part of the equation which accounts for assets that are quite different (i.e. a 5x business vs. a 15x EV/EBITDA-valued business).
Say you have a 15% yield vs. 50% LTV, that would be 3000bp spread per % of LTV (or 750bp per turn of asset coverage, does that sound better?). If it had a 15% FCF yield that would be 10000bp per % FCF (eww huge number...or 225bp per Turn of FCF Multiple).
