News Digest:

Private credit firms specializing in so-called “direct lending” are increasingly financing leveraged buyouts (LBOs) of late, as a 9.3% year-to-date decline in high-yield bonds makes it tougher for companies being acquired by private equity to sell unsecured junk bonds.

Takeaway:

Private credit funds’ growing role as a financier of big buyout transactions highlights their huge “dry powder”, estimated to be around $390bn, as well as the rapid maturity of the $1.2 trillion asset class that is replacing banks as a mainstream financier in this segment.

End Notes

Source: https://www.bloomberg.com/news/articles/2022-05-09/private-credit-is-eating-into-junk-bonds-as-competition-heats-up