The Costs of Senior Stretch and Unitranche
“Where to draw the line is also key as we examine #SeniorStretch and #unitranche loans. Besides leverage and loan-to-value, yield is helpful in identifying these financings.
Unitranche is a one-stop solution blending senior and junior tranches into one. With more than thirty unitranche suppliers out there, leverage and pricing reflect competition among those firms, rather than relative yield to first-lien or mezz.
As our Chart of the Week highlights, first-lien/mezz was the third quarter’s most expensive financing tool among private club lenders, according to Refinitiv LPC.
Unitranche has retreated in pricing since earlier in the year. That’s because it’s the most versatile form of leveraged financing. Today’s PE buyers need flexibility and speed of execution more than ever…
▶︎ Read Nov 18 2019 newsletter: here
Latest news
Rate hike expectations ease as term SOFR curve flattens
The CME six-month Term SOFR rate reached a recent high of 3.979% on July 28 before retreating to 3.837% as…
3Q26: New loan assets rise to 44% of total lending, a 3-year high
New loan assets as a proportion of total US loan volume make up 44% of the 3Q26 pipeline to date,…
North American GPs dominant as fundraising accelerates
Our PEI Private Credit 200 ranking also shows capital raising increasing overall – and accelerating especially fast for the largest…