Unitranche
Corporate Credit Analysis glossary · Capital Structure & Debt Mechanics
Definition
A blended-tranche financing combining the economics of senior and subordinated debt into a single instrument. Common in middle-market direct lending; reduces inter-creditor complexity at the cost of higher all-in pricing.
Unitranche in plain English
Normally a company borrows in layers: a "senior" loan that gets paid back first (safer, cheaper) and a "subordinated" loan that gets paid only after the senior is satisfied (riskier, pricier). A unitranche squishes those layers into one single loan at one blended interest rate — like ordering a combo meal instead of buying each item separately. Its big appeal is simplicity: with only one lender and one set of terms, nobody has to negotiate who-gets-paid-first if things go wrong, which is a common headache in mid-sized private deals. The trade-off is that the all-in interest rate is a bit higher than the cheap senior piece alone would have been.
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Practice Unitranche
A private credit lender provides a single loan to Titan… What is this product?
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