News Digest: Private credit funds swoop in as LBO financiers amid junk bond market turmoil

May 2, 2022

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.



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.



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