Key Takeaways
- • A group of private credit lenders is in talks to provide a $1.3 billion loan to finance L Catterton's acquisition of healthcare platform Fullscript, according to Bloomberg.
- • The financing comes after the deal failed to generate sufficient interest in the leveraged loan market.
- • Morgan Stanley led a group of banks that had underwritten the debt and were committed to funding the transaction, per people familiar with the matter.
- • The direct lending option would replace those bank commitments, shifting the financing from the syndicated loan market to private credit.
- • The acquisition is expected to close on Tuesday, according to the sources cited by Bloomberg.
Summary
A group of private credit lenders is in talks to provide a $1.3 billion loan to fund L Catterton's acquisition of Fullscript, a healthcare platform, Bloomberg reported. The transaction was originally structured with bank financing, but it was unable to attract enough investor demand in the leveraged loan market to proceed on that basis.
According to people with knowledge of the matter, a group of banks led by Morgan Stanley had underwritten the debt and are therefore obligated to fund the transaction if alternative financing is not arranged. The direct lending option under discussion would replace those underwriting commitments, moving the financing into the private credit market.
The acquisition is expected to close on Tuesday, the sources said. The sources asked not to be identified because they were discussing private information. The report does not disclose the final terms, pricing, or structure of the proposed private credit facility.
The situation illustrates the ongoing role of private credit as an alternative to syndicated leveraged loans for sponsor-backed buyouts, particularly when broadly syndicated demand is insufficient.
According to people with knowledge of the matter, a group of banks led by Morgan Stanley had underwritten the debt and are therefore obligated to fund the transaction if alternative financing is not arranged. The direct lending option under discussion would replace those underwriting commitments, moving the financing into the private credit market.
The acquisition is expected to close on Tuesday, the sources said. The sources asked not to be identified because they were discussing private information. The report does not disclose the final terms, pricing, or structure of the proposed private credit facility.
The situation illustrates the ongoing role of private credit as an alternative to syndicated leveraged loans for sponsor-backed buyouts, particularly when broadly syndicated demand is insufficient.
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