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

  • Equity capital dedicated to the stretch senior secured initiative totals +$640 million, which includes Solar Capital's, Voya Investment Management's, and an institutional investor's equity commitments to the SSLP initiative, 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 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, 2017, Based on Fair Value
Structure: Portfolio Companies 
(Pass-thru Entity)
SLRC Fair Value $175.4 million 
Investment Portfolio: $315.3 million
# of Issuers:
15 issuers
Average Position Size: $21.0 million 
% of Investments First Lien Senior Secured:
100%
% of Investments Floating Rate Coupon:
100%
% of Investments Performing:
100%
Weighted Average Portfolio Yield:
7.4%