Avexo Policy Grade C — Conditional approval — clear the conditions register before drawing. We evaluate this as a borrower for an asset-backed term loan, sized at $1,000,000 on the house view, within a range of $500,000 to $2,000,000 depending on risk appetite.
No trigger fired, none within 10% of its threshold. The grade summarises the conditions register. The register is the decision; the letter is the index into it. The grade states the risk; risk appetite decides the action, which is why one letter carries three of them.
Since the 2025 financials this report is built on:
- Definitive agreement to acquire Girardin Group's stake in the Micro Bird joint venture (2026-02). Consideration approximately $200M, 30% cash and 70% Blue Bird common stock. Announced alongside an expanded Ford collaboration and the purchase of a Detroit assembly plant's assets.
Not reflected in any figure, ratio or covenant test above.
| Risk appetite | Limit | Action at this grade | Controls required |
|---|
| Conservative | $500,000model-implied $16,033,333 · ceiling $500,000
bound by policy ceiling | Approve at the conservative limit only, with the register cleared as conditions precedent. | - Contracting leg only; the owned-asset leg is outside the borrowing base.
- Drawings against certified receivables, on named obligors.
- Guarantee schedule as a condition precedent.
- Supplier ageing furnished quarterly.
|
| Balanced · house view | $1,000,000model-implied $16,033,333 · ceiling $1,000,000
bound by policy ceiling | Conditional approval at the house limit — clear the register before drawing. | - Contracting leg only; the owned-asset leg is outside the borrowing base.
- Negative covenant on new guarantees above an agreed cap.
- Review event on any material change to the divestment agreement.
- Quarterly reporting against the conditions register.
|
| Growth | $2,000,000model-implied $16,033,333 · ceiling $2,000,000
bound by policy ceiling | Approve at the growth limit with the register as covenants and the named controls in place. | - Escrow on named receivables funding the facility.
- Owned-asset leg formally ring-fenced, with the guarantee position frozen.
- The whole conditions register answered before first drawing, not after.
- Monthly receivable ageing and quarterly guarantee schedule.
|
Sizing runs on the same policy engine that sizes a live application, not on a formula written for this document. The engine builds a limit from two independent paths — a working-capital path, which funds the gap between the current assets a business carries and the current liabilities that already finance them, and an earnings path, which sizes against the profit the business generates. It takes the supportable figure and applies a policy ceiling.
On public filings only the earnings path runs, and only on a monthly basis: the working-capital path needs a current / non-current split of the balance sheet that public statements do not carry, and the cash leg of the earnings path needs a split between cost of goods and operating cost that they do not carry either. Both are reported here as not computable rather than estimated.
The three bands are the same engine run at three standing risk appetites. A conservative appetite holds back more of the working-capital gap as owner margin, funds a smaller share of what remains, gives less credit to slow receivables and carries a lower ceiling; a growth appetite does the opposite and buys the difference with controls rather than with margin. The bands are fixed policy, applied unchanged to every borrower, so the spread between them is a statement about our appetite and never about this company.
All figures are in USD, the company's own reporting currency, so no currency conversion is applied.
$500,000 to $2,000,000 depending on appetite, with $1,000,000 as the house view. The range is a menu of our own stances applied to one set of facts, not uncertainty about the borrower.
Every band is bound by its policy ceiling rather than by the earnings path, and the parameters that otherwise separate the bands act on the working-capital path — which public data cannot run at all. So on filings alone the bands separate only at the ceiling. Borrower financials collapse that: the working-capital path computes, and the three bands become three genuinely different numbers rather than three ceilings.
The working-capital path — adjusted receivables and inventory plus cash, less current liabilities, at 40% of MPBF net of a 10% owner margin — needs a current / non-current split of the balance sheet and a raw inventory balance. Neither is published in a standardised public summary, so no MPBF limit is computed here. The number above is the ATP leg alone.
The engine's quarterly operating-cash leg needs a cost-of-goods line separate from operating cost. A standardised public summary publishes one operating-profit figure, so that leg is not computed here rather than approximated.
Borrower financials and a bank statement give the current / non-current split, the real inventory balance and actual utilisation — which is the difference between this indicative number and a sanctionable limit.