Unitranche facilities have been a feature of the European and US markets for a number of years, and have recently been making their mark in Australia.

What is unitranche?  A unitranche facility is a single facility which replaces the need for separate senior and mezzanine facilities and carries a blended margin. It tends to be provided by a single lender on a take-and-hold basis.

Where has it come from? Unitranche began life around 2005 in the US mid-market, and spread into Europe in the wake of the global financial crisis in 2008. European banks were forced to de-lever their balance sheets post-2008, and also saw themselves subjected to more stringent capital adequacy requirements under Basel III. Non-bank lenders, the main providers of unitranche, are outside the reach of Basel III and, having initially taken the opportunity to fill that funding gap, have since seized a large share of the European mid-market.

In this article, we provide a brief introduction to unitranche, focus on the intercreditor issues which can arise when it is combined with a revolving credit facility, and look at how unitranche is evolving in Europe and may one day develop in Australia.

Continue Reading Unitranche: On the up, down under

On 9 March 2017, Hogan Lovells hosted a panel discussion looking at the opportunities and challenges involved in direct lending in Italy. The speakers included experts with knowledge of the Italian market, who put forward their thoughts and shared their own recent practical experiences of doing deals in Italy.  This article – Direct lending in Italy – provides a summary of what was discussed in the session as well as some further background on the market.