AFO · Glossary
Unitranche
A single debt facility that combines what would otherwise be senior + mezzanine layers, blended into one rate from one lender.
What this term means in practice
A unitranche facility collapses senior + mezzanine into a single layer at a blended rate from a single lender (or a small lender club). Instead of a senior bank lender plus a mezzanine fund running parallel facilities with intercreditor agreements, the borrower has one lender, one set of covenants, and one all-in rate (typically 8–14% depending on the deal).
The benefits are administrative simplicity and faster execution. The intercreditor friction — who gets what in a default scenario, who consents to amendments, how prepayment proceeds are split — disappears because there's only one creditor. On time-sensitive acquisitions, unitranche from a private-credit fund can close in weeks where the senior + mezz structure would take months.
The trade-off is per-dollar pricing: the blended rate is usually higher than the senior portion of a stacked deal would carry. The honest comparison is the total cost including the senior + mezz coordination overhead and the value of certainty-of-close. The CPA models both structures before the term sheet is signed.
Where this matters in the catalog
Programs that turn on Unitranche.
Private Credit / Unitranche
Bespoke debt structures from non-bank private credit funds. Big-ticket only.
Mezzanine Debt
Second-lien or subordinated debt when senior capacity is exhausted.
Where the definition meets your situation.
The CPA can walk through how this concept applies to your business in twenty minutes — what providers will ask, where the negotiation matters, what the trade-offs actually look like in your numbers.