easy · Private Equity & LBOs

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

1. It only applies if the loan is converted into equity.
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 as a dividend at closing.
4. It is not allowed in unitranche structures due to regulatory constraints.

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