medium · Private Credit loan-structures-instruments
In a 'Bifurcated Unitranche' structure, a fund provides a $100,000,000 facility where a bank takes a $70,000,000 'First-Out' piece at SOFR + 350 bps and the fund retains the $30,000,000 'Last-Out' piece.
If the total unitranche is priced to the borrower at SOFR + 650 bps, what is the effective spread earned by the fund on its Last-Out position?
- 950 bps
- 1350 bps
- 1000 bps
- 650 bps
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