So, there are lots of pros and cons of unitranche loans with pricing, flexibility, simpler administrative/legal, etc. However, is there a capital structure that would make a unitranche loan preferred?
I feel like it wouldn't make much sense in a very crowded capital structure unless you're consolidating various tranches. So, is it better for less crowded capital structures (I assume often those seen in LMM/MM)?
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It’s in the name (one tranche) so, for example, instead of doing a 4x by 6x 1L / 2L you do a 6x uni tranche. That is the only secured debt then.
Typically no debt below a unitranche other than maybe preferred equity or some other more equity like junior capital.
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