Glossary definition
Unitranche
A single loan facility that combines senior and mezzanine debt into one tranche with a single set of terms and a blended interest rate, removing the need for an intercreditor deed. Unitranche facilities typically offer 70-85% loan-to-cost at rates that sit between pure senior and mezzanine pricing, often around 9-14% per annum.
Definition
A single loan facility that combines senior and mezzanine debt into one tranche with a single set of terms and a blended interest rate, removing the need for an intercreditor deed. Unitranche facilities typically offer 70-85% loan-to-cost at rates that sit between pure senior and mezzanine pricing, often around 9-14% per annum. They are well suited to mid-market developments where speed and simplicity of execution are valued over marginal cost savings from a structured capital stack.
See also
Closely related terms.
Stretched Senior
A single-tranche development loan that provides higher leverage than traditional senior debt, typically up to 75-85% of costs or 65-70% of GDV, eliminating the need for a separate mezzanine facility.
Senior Debt
The primary layer of debt in a development finance structure, secured by a first legal charge on the property and sitting at the bottom of the capital stack with first priority on repayment.
Mezzanine Finance
A layer of debt that sits between the senior loan and developer equity in the capital stack, secured by a second legal charge on the property.
Capital Stack
The total structure of funding used to finance a development project, arranged by seniority from senior debt at the bottom through mezzanine finance to developer equity at the top.
Further reading
Guides that touch this term.
Guide
The Capital Stack in Property Development: How to Structure Your Funding
A comprehensive guide to understanding and structuring the capital stack in UK property development, from senior debt through mezzanine to equity contributions.
9 min read readReadGuide
Bridge First, Then Development Finance: When Bridging Comes First
Some sites have to be bought before a development facility can be put in place. This guide explains when a bridge comes first, how the bridge-to-development refinance works, and what to agree with the bridging lender at the outset.
6 min read readReadGuide
Can I Get Development Finance With No Track Record?
An eligibility guide for developers without a completed scheme. We explain which lenders will consider you, exactly what they check, and the lower leverage and higher pricing to expect.
5 min read readRead
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