Zachary Ishee

Unitranche financing structures, also known as first out/last out or "FOLO," are not new to the lending market but have become increasingly common in recent years, particularly in private equity sponsor-backed middle-market transactions. In recent years, unitranche deal volume in the U.S. has experienced significant growth, with industry estimates indicating that middle-market issuances reached a record $210 billion in 2024, up from $94 billion in 2023.

The Securities Exchange Commission (SEC) and the U.S. Department of Treasury's Financial Crimes Enforcement Network (FinCEN) issued a proposed rule on May 13, 2024 (Proposed Rule), which could have sweeping effects on the practices of both Registered Investment Advisers (RIAs) and Exempt Reporting Advisers (ERAs), (RIAs and ERAs collectively, Advisers).

Effective December 25, 2023, Tennessee Rule 0780-4-3-.05 was amended to include a new exemption to registration requirements for investment advisers under Tenn. Code. Ann. § 48-1-109 (the Amended Rule).