Private Credit’s $10 Billion Win Is Bad News for Wall Street

Private credit is muscling in on another market traditionally dominated by banks: debt refinancing.

(Bloomberg) — Private credit is muscling in on another market traditionally dominated by banks: debt refinancing. 

Companies with leveraged loans and junk bonds coming due soon are increasingly turning to private credit lenders to refinance their obligations, with around $10 billion of the loans having been replaced in recent weeks. Thoma Bravo-owned Hyland Software Inc. is turning to a group led by Golub Capital to refinance about $3.2 billion of maturing debt.  

That deal came after a record-breaking $5.3 billion refinancing package for Finastra Group Holdings Ltd., a financial software firm backed by Vista Equity Partners. A group of private credit lenders stepped in after the company saw its ratings cut and faced a potentially painful negotiation with existing creditors that had organized and hired a financial adviser and legal counsel. 

For years, private credit lenders have been providing financing for leveraged buyouts, funding deals that would have otherwise relied on the syndicated loan or junk bond markets. That’s translated to Wall Street banks missing out on lucrative underwriting fees, cutting into an important stream of revenue for the firms. 

But leveraged buyout volume has been relatively light this year. With fewer deals to fund, private lenders are looking for other ways to deploy their dry powder, which amounts to $443 billion globally as of September, according to estimates from research firm Preqin. Refinancing looks like an attractive opportunity to the firms.   

“It’s private credit coming out of the shadows,” said Ranesh Ramanathan, co-leader of Akin Gump Strauss Hauer & Feld LLP’s special situations and private credit practice. “Private credit is now part of the recognized pool of capital you’d look to.”    

For companies, refinancing with private credit lenders will often cost more in terms of interest paid. But going the direct lending route offers financing that is highly likely to close, at a time when leveraged finance markets can be all but shut for weeks. And while banks will look to sell leveraged loans or junk bonds to dozens of investors, potentially leading to protracted conversations among many parties on pricing and other terms, private credit deals typically involve just a few lenders.     

Medical device manufacturer Tecomet, backed by Charlesbank Capital Partners, recently refinanced more than $1 billion of broadly-syndicated debt with the help of private credit lenders.

Many leveraged loan borrowers refinanced debt in late 2020 and 2021 when rates were low and credit markets were strong, but there are still companies with upcoming debt maturities. About 2% of the roughly $1.4 trillion US leveraged loan market matures in 2024, and another 10.3% matures in 2025, according to data from Barclays Plc. Companies typically refinance debt at least one year in advance, meaning borrowers are looking closely at how to deal with loans maturing in 2025.

Competition from private credit could weigh on the growth of the leveraged loan market, according to Barclays strategists. 

“With alternative financing sources such as private credit and secured bonds continuing to take share from loan primary markets,” there could be “further headwinds for growth of the loan index, which has already fallen by $38 billion from its peak of $1.436 trillion in September 2022,” wrote Barclays strategists in June.


  • A group of private lenders including Blue Owl Capital Inc. and Blackstone Inc. is providing $2.7 billion of debt to help fund BradyIFS’s acquisition of competitor Envoy Solutions
  • Vietnamese financial firm F88 Investment JSC has secured a $50 million private loan to help expand its presence in the country’s non-banking sector
  • Blackstone’s credit unit is supporting Permira Holdings’ takeover of biopharmaceutical services firm Ergomed Plc with a £285 million debt package
  • A trio of private lenders including Blackstone agreed to provide a £180 million loan to help finance GTCR’s acquisition of compliance and supply chain management software platform Once For All


  • Blackstone’s nearly $50 billion private credit fund for affluent individuals attracted the most capital in more than a year, as the asset class sees a rebound in fundraising
  • Asset manager Phoenix Holdings announced a partnership to invest as much as $2 billion with Apollo Global Management Inc. in Israel

Job Moves

  • 26North Partners, the investment firm started by Apollo co-founder Josh Harris, named seven new partners for an array of roles as it starts a direct-lending business
  • Golub Capital appointed Sean Chung as managing director based Seoul, expanding its team focused on South Korea
  • Dan Loeb’s Third Point hired Chris Taylor, a former New York Life Investments executive, to head the hedge fund firm’s new direct-lending strategy

Did You Miss?

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  • Oaktree’s Panossian Sees Private Credit Luring Cash Away From PE
  • Ares Bosses Reap $250 Million Selling Shares as Credit Booms
  • Blackstone’s Scott Says Private Debt’s Certainties Offer An Edge
  • Japan, Korea Are Attractive for Tanarra’s Private Credit Lending
  • Barclays Sets Aside Balance Sheet Cash for Private Debt Push

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