Lenders generally parcel out leveraged loans to institutional investors such as mutual funds and collateralized loan obligation managers, as well as to other banks. Sellers of newly issued buyout debt were receiving an average of 94.8 cents on the dollar as of June 23, down from 99.2 cents at the end of January, according to Leveraged Commentary & Data. That spells trouble for deals like the take-private of cloud-computing company Citrix Systems Inc., the largest private-equity-backed leveraged buyout in the U.S. so far this year. To get deals done, buyout firms are increasingly turning to private-credit providers such as Blue Owl Capital Inc. and Golub Capital rather than banks. These firms don’t have to syndicate debt and can provide capital from investment vehicles established to do so.

Source: Wall Street Journal July 04, 2022 09:09 UTC