medium · Private Equity advanced-lbo

In a unitranche facility, which statement about OID is generally true?

1. It only applies if the loan is later converted into equity by the entire lender syndicate group.
2. It is typically higher than a first-lien Term Loan B to reflect the blended risk of senior and junior debt.
3. It is paid back to the sponsor immediately as a special dividend at the closing of the whole transaction.
4. It is not allowed in unitranche structures because of regulatory capital constraints on blended lending facilities.

Sign up free to see the explanation and track your rank →