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 Senior Secured Unitranche Loan Program ("SSLP" + "SSLP II")

Business Overview

  • Strategic initiative with institutional investors that enhances the core origination business’ suite of financing alternatives via the ability to underwrite and hold unitranche loans of $100+ million

  • Equity capital dedicated to the unitranche initiative totals $625 million, which includes Solar Capital's and Voya Investment Management's equity commitments to the SSLP, as well as an additional institutional investor's commitment to co-invest up to $300 million of equity in unitranche loans alongside the SSLP. With anticipated leverage of 1.5x-2.0x debt-to-equity, the strategy is expected to have in excess of $1.5 billion of investable capital, which may be increased through additional co-investments by new and/or existing partners
  • Target issuers for unitranche loans are the same as those in the core origination business: established sourcing network for the product and increases Solar Capital's relevance to sponsors

  • Disciplined, patient approach to ramping the unitranche portfolio, consistent with Solar Capital Partners’ investment philosophy

Borrower Profile Characteristics

  • Sponsor or entrepreneur-owned

  • Private

  • Predominantly North American-domiciled 

  • +$15 million of EBITDA

Typical Transaction Profile

  • Senior secured unitranche loans combine a typical senior and junior financing into one tranche

  • As typically the sole debt provider, unitranche structures provide the lender with more control and a greater ability to negotiate terms, including covenant protection

  • Senior secured unitranche loans are expected to provide attractive risk-adjusted returns based on being dollar-one risk and having greater structural protections, which should enhance recoveries in the event of default

Financial & Portfolio Snapshot

As of September 30, 2017, Based on Fair Value
Structure: Portfolio Company 
(Pass-thru Entity)
SLRC Fair Value $139 million 
Total Investment Portfolio: $290 million
# of Issuers:
 16 issuers
Average Position Size: $18 million 
% of Investments First Lien Senior Secured:
100%
% of Investments Floating Rate Coupon:
100%
% of Investments Performing:
100%
Weighted Average Portfolio Yield:
~7.7%