medium · Private Credit & Debt loan-structures-instruments
A company with 30M in EBITDA requires 150M in total debt. A lender offers a unitranche facility. In a traditional split, the senior tranche (3.5x leverage) would price at SOFR + 475 bps and the mezzanine tranche (1.5x leverage) would price at 13.00% fixed.
If SOFR is 5.00%, what is the mathematically equivalent blended rate for the unitranche?
- 11.38%
- 10.73%
- 10.15%
- 12.00%
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