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 to 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.