Seward & Kissel briefing: What Hedge Funds and Private Equity Funds need to know when providing subordinated debt through unitranche facilities
Seward & Kissel’s memorandum examines the key aspects of Unitranche Loan Structures.
On 22 February 2016, Seward & Kissel published a memorandum which examines the key aspects of Unitranche Loan Structures, which have recently become a popular tool in the world of middle market lending.
A unitranche loan involves a single loan instrument between the senior lender and borrower, a single tranche of interest and principal payments, a single set of covenants and defaults and a single security arrangement between the senior lender and the borrower.
The arrangement contemplates that the senior lender may obtain funding of a portion of the funds advanced from other lenders, but the borrower is generally not involved in those arrangements, except to acknowledge their existence.
The Seward & Kissel memorandum provides an introduction to the Unitranche Facility and then examines some of the concerns the subordinated lender should consider when entering into such a Facility.
For more information contact an attorney at Seward & Kissel, Richard Perry or Devarshi Saksena.
