First-out / last-out

A contractual allocation of payments and losses among participating lenders, often within a unitranche or intercreditor arrangement. Priority and triggers depend on the agreement rather than the facility name alone.

First-out / last-out in round numbers

Hypothetical: a US$100m facility comprises US$30m first-out and US$70m last-out principal. Assume the agreed waterfall repays first-out principal before last-out principal when its relevant trigger applies. This priority is among those participants, not necessarily ahead of every other creditor in the company’s capital structure.

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