Unitranche loses favor in 1Q17 as sponsors gravitate toward second-lien

A recent middle market lender survey revealed that sponsors are favoring the first­/second­ lien structure according to 42% of respondents. Meanwhile, in the survey carried out by Thomson Reuters LPC, 27% said the unitranche is the most favored structure by sponsors today. This is a meaningful departure from this time last year when half of the buyside and sellside survey respondents said sponsors preferred the unitranche structure. More onerous call protection, higher pricing and the need for covenants are typical of the unitranche...