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 stretch first lien and senior secured unitranche loans of $100+ million

  • Equity capital dedicated to the stretch senior secured initiative through SSLP and SSLP II totals +$300 million, which includes Solar Capital's and Voya Investment Management's $200 million commitment to SSLP and Solar Capital's and an institutional investor's approximately $100 million commitment to SSLP II. With anticipated leverage of 1.5x-2.0x debt-to-equity, the strategy is expected to have in excess of $750 million of investable capital, which may be increased through additional co-investments by new and/or existing partners
  • Target issuers for stretch first lien and senior secured 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 stretch first lien and senior secured 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

  • Stretch first lien and 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

Combined Portfolio Snapshot

As of March 31, 2018
Structure: Portfolio Companies 
(Pass-thru Entity)
Investment Portfolio: ~$304 million
# of Issuers:
15 issuers
Average Position Size: ~$20 million 
% of Investments First Lien Senior Secured:
% of Investments Floating Rate Coupon:
% of Investments Performing:
Weighted Average Portfolio Yield: