What defines the 'Back Stopped' method of committing capital?

The 'Back Stopped' method of committing capital is defined by placing a ceiling on borrowing costs. This approach ensures that investors will not face excessive costs associated with borrowing, which mitigates the risk associated with the investment for both the lenders and the borrowers. By capping borrowing costs, it provides a safety net for the involved parties, enabling them to manage financial risks more effectively.

In leveraged finance, this can be particularly important since high borrowing costs can significantly impact the viability of a leveraged buyout or similar financing structures. A cap on these costs allows participants to plan their capital structures confidently, improving overall deal execution and investor sentiment.

The other choices involve different aspects of capital commitment or bond issuance that do not directly relate to the concept of 'Back Stopping' in this context. For example, placing no limitations on borrowing costs would expose participants to higher risks, while guaranteeing all terms of a bond issue pertains more to the assurance of fulfilling specific bond conditions rather than capping costs. Similarly, committing to a minimum amount of orders relates to order commitments rather than the interest or borrowing cost dynamics at play in the 'Back Stopped' method.