In one sentence
A single blended loan combining what would otherwise be senior and subordinate debt into one facility at one blended rate.
The longer version
A unitranche merges senior and mezzanine-like debt into a single loan, simplifying the borrower's capital stack and documentation. Behind the scenes, lenders may still divide the economics through an agreement among lenders.
Common in middle-market and private-credit lending, unitranche structures streamline the borrower's experience while shifting complexity to the lender side.
Common questions
- What is a unitranche loan in real estate?
- A single loan at one blended rate that combines what would otherwise be senior and subordinate debt, avoiding an intercreditor relationship for the borrower.
- Why would a borrower choose a unitranche loan?
- For simplicity: one lender, one set of documents and one rate instead of negotiating senior and mezzanine lenders separately.
- Can a unitranche loan be split behind the scenes?
- Yes. The lender may later sell or finance a senior portion and keep the subordinate, governed by an agreement among lenders the borrower may not be party to.
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