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9 Pratt's J. Bankr. L. 487 (2013)
Unitranche Financing Facilities: Simpler or More Confused

handle is hein.journals/prattjb9 and id is 499 raw text is: Unitranche Financing Facilities: Simpler or More Confused? BRAD B. ERENS AND DAVID A. HALL The unitranchefinancingfacility, versus a more traditional two-loan structure, is widely thought to generate efficiencies, ease the process of clos- ing, streamline administrative functions, and, ultimately, to pass along cost savings to lenders and borrowers. The authors of this article examine unitranchefinancingfacilities, and conclude that while unitranche deals offer clear benefits, there are significant elements of uncertainty associated with such deal structures that the carefulpractitioner must be aware ofin drafting loan documents and advising clients. U nitranche facilities are a relatively recent innovation in the middle market lending sector designed as an alternative to the typical first and second lien loan structure. The unitranche facility, versus a more traditional two-loan structure, is widely thought to generate efficien- cies, ease the process of closing, streamline administrative functions, and, ul- timately, to pass along cost savings to lenders and borrowers. A middle market loan is often structured as two separate loans - a first lien facility and a second lien facility. The first lien facility generally consists of the larger portion of the overall borrowing, including, potentially, both a term and revolving loan. The first and second lien lenders commonly will take security interests in the same collateral - substantially all of the borrow- Brad B. Erens is a partner in the Business Restructuring and Reorganiza- tion practice at Jones Day in Chicago. David A. Hall is an associate in the Banking and Finance practice at the firm.The authors may be contacted at bberens@jonesday.com and dahall@jonesday.com, respectively. 487

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