Unitranche is a single loan facility that blends what would otherwise be separate senior and subordinated tranches into one instrument, with one blended interest rate and one set of documents. Typically provided by private credit funds, it simplifies the capital structure and speeds execution, in exchange for pricing above pure senior debt.
One lender, one document and one rate make unitranche faster and simpler to execute than building a multi-layer stack.
Used in acquisition finance, buyouts and refinancings, mainly from private credit funds.
Unitranche is a single loan facility that blends what would otherwise be separate senior and subordinated tranches into one instrument, with one blended interest rate and one set of documents. Typically provided by private credit funds, it simplifies the capital structure and speeds execution, in exchange for pricing above pure senior debt.
Used in acquisition finance, buyouts and refinancings, mainly from private credit funds.
Not necessarily on headline rate: the blended unitranche rate sits above pure senior debt because it absorbs the subordinated risk into a single instrument. Its advantages are speed, simplicity and certainty — one lender, one document and one rate — which can outweigh a modest pricing difference against a multi-layer stack.
Unitranche is typically provided by private credit funds rather than commercial banks. It is most often used in acquisition finance, buyouts and refinancings, where a single lender able to commit the whole facility gives the borrower faster execution and one set of documents to negotiate.
Speak to a partner about how this applies to your transaction.
