For mezz investors accustomed to being part of larger club deals, these issues have turned this year into a slog. “It’s tough to get scraps from the big guys,” one long-time pilot fish remarked. “They’re so hungry for paper, they’re holding on to every dollar.”

Of course for a mid-sized fund, say $300-500 million, deal flow is relative. “I only need to do six deals a year, and my LPs are happy,” a first-tier manager boasts. “Who cares how many unitranche and second liens are getting done? For me, that’s irrelevant.”

So what are “market” structures and pricing for mezz? Junior sub debt has historically provided one to one-and-a-half turns of Ebitda above the senior secured tranche. Because of its higher costs of capital, issuers are keeping that ratio pretty close today.

For total leverage, arrangers say, you need the right capital structure going in. Having been through the credit crunch with their portfolio companies, mezz is trying to keep that number below five times. Perhaps a tad higher for the larger, more defensive mid-caps.

Pricing-wise, the cash portion of mezz interest has been 12% since the Truman Administration, but the PIK piece now varies from 1% to 4%, again depending on the credit. Upfront fees have been pretty steady around 2%.

Call protection? That’s a key return consideration for sub investors – and a bête noire for sponsors. “I’ll be aggressive with pricing at the front-end,” one mezz vet tells us, “if I know my asset is sticky.” The call premium bid/ask is 105 (year one), 104, and so on – at the issuer-friendly end of the spectrum – with two years non-call at the other end. A typical deal might be a one year non-call followed by 103, 102 in years two and three.

Who are the active pure-play mezz players? Setting aside Goldman with its $15 billion fund, those who have raised money this year include AEA, Audax, Crescent Capital, Kayne Anderson, Morgan Stanley, Oaktree and Yukon. Other long-time mid-cap arrangers are Arrowhead, Garmark, Golub, LBC, Norwest and PNC.

For smaller deal sizes, firms such as Maranon and Praesidian distinguish themselves by being able to provide both one-stop and sub debt alternatives.

Throw in the expansion of the SBIC program (which is minting mezz availability) and public funds like Fifth Street, Medallion and Triangle, and you’ve got plenty of junior sub capacity at the lower-end of the middle market.

Does that bother our six-deal-per-year mezz manager? “Those guys will be chasing the same $2 million Ebitda company in Cleveland,” he scoffs. “You know what? Let ‘em.”

Randy Schwimmer is senior managing director and head of capital markets with Churchill Financial.