easy · Private Credit loan-structures-instruments
A private credit fund is evaluating a 'Unitranche' loan for a borrower. The facility is internally split: a bank provides the 'first-out' portion at SOFR + 350 bps, and the credit fund provides the 'last-out' portion at SOFR + 850 bps.
What is the borrower's experience in this transaction?
- The borrower must negotiate two separate credit agreements with different covenants.
- The borrower only interacts with the bank, as the fund is a silent participant with no legal standing.
- The borrower pays a single blended interest rate to one lead agent.
- The borrower pays the bank and the fund separately according to their individual risk spreads.
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