Unitranche in LBO
How do you structure unitranche in an LBO model for the mid market?
I would say L+650-700, 50% PIK 50% cash interest rate; does that make sense? Thank you!!! very much
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Probably too heavy on the PIK. If you're L+7, you're looking at maybe 2% PIK. Don't see too many lenders go higher than like 3%, but it depends on the situation (distressed? early stage?). Also, MM is a huge range of companies... is EBITDA $5m, $15m. $50m?? Would be a totally different answer.
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