medium · Private Credit & Debt loan-structures-instruments
A borrower requires $200,000,000 in total debt. A unitranche lender offers a single facility at SOFR + 650 bps. Alternatively, the borrower could use a bifurcated structure with $140,000,000 of first-out senior debt at SOFR + 400 bps and $60,000,000 of last-out debt.
What must the rate on the last-out tranche be to equal the 6.50% blended margin of the unitranche?
- 10.50%
- 15.00%
- 9.00%
- 12.33%
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