You are managing a private lending fund and you looking to lend $1,000,000 to a distressed loan borrower who you convinced that he could turn around his situation. The terms of the loan are as follows: $1,000,000 loan amount 12% interest only. 1 year term with full principal repayment at maturity You have a long-standing relationship with a banking institution where they will take a senior position on the loan facility by assignment of documents and will lend you 70% of the note or $700,000 at an interest only of 7% for the same duration as your underlying loan. Please calculate the IRR/yield to the private fund