medium · Private Credit loan-structures-instruments
A 100 million unitranche facility is structured with a 'first-out' tranche of 70 million priced at SOFR + 350 bps and a 'last-out' tranche of 30 million priced at SOFR + 850 bps.
If SOFR is 5.0%, what is the blended interest rate to the borrower, and which document governs the relationship between the first-out and last-out lenders?
- 10.0% blended rate; Limited Partnership Agreement (LPA)
- 11.0% blended rate; Inter-creditor Agreement (ICA)
- 9.25% blended rate; Credit Agreement
- 10.0% blended rate; Agreement Among Lenders (AAL)
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