Unitranche
A single senior secured loan that combines the economics of senior and subordinated debt into ONE instrument at a single blended rate (historically L+850 to L+1100; today commonly SOFR+475 to SOFR+700 in the middle market). Unitranche has FIRST-LIEN priority on collateral by construction — it IS the first (and only) lien — so recovery in distress looks like senior-secured (~75-85% per Moody's middle-market LGD studies), not mezz. When two or more lenders share a unitranche, they may sign an Agreement Among Lenders (AAL) that re-tranches the economics privately into "first-out" and "last-out" pieces; the borrower still sees one loan with one rate. Popular with BDCs because it simplifies documentation, accelerates execution, and keeps deal flow in-house.
Lessons that use this term
Related terms
Absorption Rate · AFFO per Share · Allowed Return on Equity · Alternative Investments · Anchor Tenant · Assets Under Management
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