In a recent conversation with a good friend in private credit, a veteran of the industry for many years, he reminded us of the history of one-stop financing. “In the beginning,” he reminded us, “unitranche was a creature of broken markets. It was designed to step in when banks were backing away. Today it’s accelerating…
According to Refinitiv LPC, US unitranche volume came to almost $22 billion last quarter – the highest level they’ve tracked historically. That activity was comprised of records for both the middle and the larger corporate markets. At the same time, one-stop risk/return dynamics have moved in favor of issuers. The average debt/ebitda is now at a…
In October 2015 we published a series of articles on the unitranche, what we called “one of the most innovative, and increasingly popular, financing tools in the middle market.” Those commentaries were consolidated into a white paper: “The Unitranche – What it is, and Why it Matters.”. In that white paper we covered the history…
As we conclude our special series on leveraged loan recoveries, let’s take a look at one structure that is testing the way credit managers think about loan value. Unitranche financings are so much a part of the middle market buyout landscape today, that it’s hard to imagine a time without them. Yet on the evolutionary…
The notion that the middle market has reached a level of maturity was supported by a plethora of evidence this past year. For one thing, arrangers showed astonishing underwriting capacity by taking on a number of large-cap sponsored buyouts. Probably the most precedent-setting was Qlik Technologies. At just over $1 billion, this Ares-led unitranche represented a…
Beginning in October 2015 The Lead Left published a series of articles on the unitranche – one of the most innovative, and increasingly popular, financing tools in the middle market. This report consolidates those articles: What is a Unitranche? Types of Unitranche Structures The Agreement Among Lenders (AAL) The Universe of Unitranche Players Key Unitranche […]
This week we wrap up our unitranche series by asking the $64,000 question that always surfaces in discussions about the future of the unitranche: How will it fare in bankruptcy? With providers that do not bifurcate the unitranche between first-out and second-out lenders, there are no intercreditor issues to consider. But for those that do,…
There are two kinds of unitranche providers. Both provide the entire financing to the borrower at a given spread in one debt tranche. But one type bifurcates the tranche into first-out and last-out term loans to different lenders. The other doesn’t. As we’ve discussed in previous instalments of our unitranche series, one-stop structures are becoming…
So far in our unitranche series we’ve examined the structural variations of this increasingly popular financing tool for leveraged lenders and sponsors. This week we look behind the curtain at the dynamics between lenders in the unitranche itself. For some unitranche options, one debt provider alone mimics the leverage that would be offered by both…