Lenders are finding it less appealing to join together in unitranche funding deals as falling yields coupled with larger deal sizes have dampened returns, reports Reuters LPC.

According to LPC, at least 12 joint ventures were formed between 2014 and 2016 to serve that market, with one lender usually providing the senior or first-out position and another the last-out junior.

Since then, no such joint ventures have been established, and two have been dissolved – including one with lender LStar Capital, which pulled out of its unitranche joint venture with Antares Capital in May, as ABL Advisor reported.

"First-out/last-out unitranche [was] simple when deals were smaller," one lender told LPC. "But as deals have gotten bigger- over $125 million - it gets much more complicated."

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