Unitranche

A single borrower-facing financing facility combining features of senior and junior debt, commonly with blended pricing. One facility can have multiple lenders, which may allocate first-out and last-out priorities among themselves; borrower involvement and documentation vary.

Unitranche in practice

Hypothetical: several lenders provide one unitranche facility to a buyer. The facility may simplify borrower-facing terms compared with separate senior and junior loans, while inter-lender arrangements allocate priority. Pricing, covenants, disclosure and borrower participation depend on the documents. Additional facilities may still exist; a single facility does not mean a single lender.

Source: Mayer Brown: unitranche structures and lender arrangements.

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