The starting point was a blank sheet of paper, onto which we would eventually write the names of private debt’s defining deals of recent years. As part of the process, we invited the market to send us their nominations. Such was the interest and enthusiasm generated that whittling the multitudes of contenders down to a top 10 was a substantial challenge.

Despite the pause during the initial global covid outbreak in the early months of 2020, the deal market came roaring back in the second half of that year and then retained its momentum throughout 2021. It was labelled by many a ‘boom year’ for M&A of all types, including transactions featuring private debt firms. Furthermore, although there are mounting fears over the macroeconomic and geopolitical landscape, activity has continued to be strong this year – adding up to a ‘spoilt for choice’ scenario.

Suffice to say, the 10 deals we focus on here are not the only ones that merited inclusion – the overall quality of transactions we considered (whether they were internally sourced or recommended to us by others) was remarkably high. As a consequence, while the examples of high-performing deals were many, we then had to focus on the more innovative aspects that made our chosen transactions not only impressive but also different in some way.

Just a few examples: the deal that showed what was possible in the nascent secondaries market; the deal that completely transformed a business and made it a key infrastructure asset; and the deal at the forefront of the push towards tying ESG responsibilities to the documentation. You’ll find there’s also something of interest for whiskey connoisseurs.

In the text that follows, you will find summaries of all our deals – key facts plus a summary of key features of each deal and why, in our view, they merited inclusion. You are of course entirely free to disagree with the choices we’ve made but we hope that at least we’ve created some talking points.

1 The junior deal aided by internal expertise

Familiarity with the sponsor, sector specialisation and speed of execution were
all factors as KKR and Ares completed a seminal junior capital deal

Deal: Athenahealth (KKR/Ares Management)

Feb 2019 Closed

$5bn Deal size

Fund manager, other financiers, advisers and other parties: KKR, Ares Management

Veritas Capital and Evergreen Coast Capital, the private equity subsidiary of Elliott Management, agreed to acquire Athenahealth, then publicly traded on NASDAQ, for $5.7 billion in November 2018.

When it came to securing financing for the transaction, KKR was one of the first calls the sponsors made, given a longstanding relationship with Veritas Capital. Because of its ability to participate in size and scale, KKR was able to drive the terms and negotiation process.

Following extensive diligence, KKR, in conjunction with Ares Management, agreed to provide a $1.4 billion private second-lien term loan and a payment-in-kind preferred equity instrument that enabled Veritas to have certainty of financing for the transaction. KKR and Ares also provided an $800 million first-lien term loan commitment into the senior loan underwrite as part of the transaction.

KKR remained in dialogue with Veritas during their ownership and worked closely with Veritas to refinance the investment in 2021. Given its familiarity with the company and capital structure, KKR was in a strong position to provide financing for Hellman & Friedman and Bain Capital’s $17 billion buyout of the company in 2022.

The financing that KKR and Ares provided to Veritas represented one of the largest junior debt transactions at the time. The deal was also structured in a unique way, with the second-lien term loan and PIK provided together in a single package, which enabled the sponsor to have certainty and speed of execution.

The underwriting complexity of the deal was also a key distinguisher. KKR had an expert in healthcare on the team who was closely involved in the diligence process needed to consummate the investment. Because of this internal resource, especially through the diligence process, the firm was able to have high conviction in the transaction and finalised the deal within three weeks, compared with the usual period of four to eight weeks for similar deals.

The way the deal was structured allowed the company to get appropriate rating agency treatment, along with leverage structured in a way to achieve appropriate ratings for the rest of the financing. The rating allowed Veritas to take on more leverage to buy the company and execute on the value creation plan.

Due to owning the PIK security and the second lien, KKR saw what the firm needed to raise in order to put capital in place and was able to provide a holistic solution across a number of capital structures. The investment had a low-teens internal rate of return.

2 An asset-backed solution done at speed

HPS had a blank sheet of paper to craft a financing solution for a company in need of short-term liquidity

Deal: Bombardier (HPS Investment Partners)

Aug 2020 Closed

$1bn Deal size

Fund manager, other financiers, advisers and other parties: HPS Investment Partners (administrative agent, collateral agent), HPS Direct Lending (lead lender), Apollo Capital Management, Ares Management, Citigroup, Latham & Watkins (legal adviser to HPS Investment Partners)

HPS Direct Lending was introduced to the opportunity in June 2020, in the wake of the onset of the covid-19 pandemic, a period during which capital was scarce and the syndicated markets were shuttered.

Bombardier, the Canada-based business jet manufacturer, sought to bolster its interim liquidity to achieve a bridge to the eventual sale of its transportation business to Alstom. It was in search of a capital partner with the ability to craft a bespoke financing solution that would fit within the confines of a complex existing capital stack, would meet the necessary size commitment and move with speed and certainty.

The investment in Bombardier by HPS Direct Lending arguably shows the power of a scaled credit platform with experience of non-sponsored financing and complex, cross-jurisdictional structuring. HPS Direct Lending was essentially given a blank sheet of paper to craft an effective capital solution for the company.

HPS Direct Lending devised and executed an asset-based facility backed by high-quality accounts receivables and inventory, which both maximised Bombardier’s proceeds and avoided triggering key provisions within the existing bond indentures, a critical consideration for the company.

HPS Direct Lending was mandated to lead the $1 billion senior secured term debt facility, which was structured as a $750 million funded term loan and a $250 million delayed draw facility. It was the only secured debt in Bombardier’s capital structure, implying a very attractive and low loan-to-value. It also benefited from structural support from the parent company and its subsidiaries that housed key collateral and had strategic stand-alone value.

HPS Direct Lending was able to move from non-disclosure agreement to a fully diligenced, investment committee-approved commitment in around 30 days for the entirety of the $1 billion. In February 2021, approximately six months post funding, Bombardier completed the sale of its transportation segment to Alstom for $3.6 billion and voluntarily repaid the facility at the prevailing call protection.

The deal is a good example of the trend observed over the past few years for larger companies to seek private debt as an alternative to the public capital markets, even during periods when the capital markets can offer attractive or competitive pricing.

The value of a stable, long-term credit partner was highlighted during the market’s 2020 trough, when private credit firms such as HPS continually deployed capital despite volatile markets.

3 The transformation of an energy asset

SVPGlobal took a hands-on operational approach to a waste management business, driving strong returns in the process

Deal: Cory Riverside Energy (SVPGlobal)

Jun 2018

£700m Deal size

Fund manager, other financiers, advisers and other parties: n/a

Cory Riverside Energy is a waste management business, familiar to Londoners due to its barges on the River Thames. SVPGlobal began purchasing Cory’s senior debt in 2014 directly from lenders, entering at an enterprise value of less than £700 million ($746 million; €778 million).

In 2015, SVPGlobal drove the company’s debt-for-equity restructuring, eventually taking control. Having obtained control, it created operational value within the business by: restructuring the company’s business segments, increasing operating efficiency, expanding commercial relationships and planning for future growth.

Cory was transformed from an overleveraged, inefficient, multi-segmented business to a core infrastructure asset, with a streamlined, environmentally friendly operating structure, serving Greater London’s waste disposal needs and creating more than $1.2 billion of value for equity holders.

While consistent with SVPGlobal’s standard methodology, the Cory transaction was a particularly complex, multi-year undertaking that demanded a bespoke, co-ordinated effort. SVPGlobal funds began purchasing Cory’s senior debt in August 2014, sourcing the pre-reorganisation debt from five European banks. At the time, its equity sponsor was minimally involved, and its lending syndicate fragmented.

When Cory emerged from its debt-for-equity restructuring in August 2015, SVPGlobal funds controlled 39 percent of its equity. The firm then negotiated rights of first refusal with the post-reorganisation shareholders. Through those rights, SVPGlobal funds continued to purchase stakes in Cory through 2016. By the end of this process, they had accumulated 60 percent of the equity in Cory.

Upon investment, Cory was a mix of disparate business lines (collections, landfill and gas, and an energy-from-waste plant called Riverside) poorly bound together by a convoluted financial structure developed piecemeal. The company needed a major financial restructuring, a strategic repositioning and new initiatives to propel growth.

SVPGlobal took charge, engaging a new management team that shared its vision for the company. It saw the collections and landfills segments were languishing while Riverside was thriving, with the potential to be very valuable.

Working with SVPGlobal, Cory’s new leadership sold the collections business in 2016 (to Biffa), and the landfills business in 2017 (to Armour Group). With the legacy businesses gone, the group focused on Riverside, scaling up operations and winning new contracts, implementing a new waste-flow model to increase through-put, doubling capex, and successfully re-characterising the facility as core London infrastructure through lobbying government and campaigning in the infrastructure press.

By the time of its sale Cory had become an essential part of London’s infrastructure, processing around 17 percent of the city’s non-recyclable waste, and one of the top three most efficient energy-from-waste providers in the UK, operating at 100 percent availability and 90 percent efficiency.

In 2018, SVPGlobal led the sale of Cory to a consortium of infrastructure investors for around £1.6 billion.

4 A first in the secondaries market

Establishing a continuation vehicle for fund investors was a sign that an emerging corner of the private debt universe was coming of age

Deal: Eurazeo private debt secondary transaction (Pantheon)

Dec 2021 Closed

€108.8m Deal size

Fund manager, other financiers, advisers and other parties: Ely Place Partners, Eurazeo (fund manager); Pantheon, Pennington Partners, Oddo-BHF Private Equity Advisers (secondary LPs) ; DLA Piper (legal adviser to Eurazeo), Hogan Lovells (legal adviser to Pantheon)

In December 2021, London-based advisory firm Ely Place Partners announced it had acted as exclusive adviser to Eurazeo on a complex secondary transaction involving the establishment of a continuation vehicle for the provision of liquidity for investors across three separate private debt funds.

Alongside the continuation vehicle, the team also raised capital to fund a strip sale of Eurazeo’s flagship debt fund and raised new primary capital. The total size across all components of the groundbreaking transaction was in excess of €100 million. As part of the extensive process, Ely Place says it approached more than 50 potential bidders, comprising specialist secondaries buyers, asset managers, consultants, pension funds and sovereign wealth funds, as well as wealth managers.

Pantheon led the successful investor syndicate, which also featured Pennington Partners and Oddo-BHF Private Equity. The transaction achieved a number of critical objectives for Eurazeo: it provided liquidity for investors in three of its legacy funds via the continuation vehicle, enabled it to rebalance the portfolio of its flagship fund via the strip sale, and allowed it to grow assets under management with a number of leading institutions.

The deal was widely acknowledged as the first deal of its kind in the private debt space, in particular in relation to the combination of the three innovations of a continuation vehicle, strip sale and new primary commitments. When the process was launched, most assets were on a recovery path following the covid-19 pandemic. While the assets were of good quality with strong potential, it was nevertheless a period of considerable uncertainty. Ely Place says it envisaged it could be a challenge to achieve an acceptable price for the sellers, while also remaining attractive enough to hit the return targets of the buyers.

Ultimately, the competitive dynamic, quality of information provided by the GP and detailed analysis done by the buyers led to a satisfactory outcome. Sources involved in the deal were unable to provide specific numbers on performance since it closed but insist that Eurazeo’s objectives on volume and price were met, while the transaction has also delivered well for the buyers.

Private debt secondaries, while representing a small portion of the total secondary market today, have been growing significantly in recent times, with several institutions raising dedicated pools of capital. The Eurazeo deal was a marker of the private debt secondaries market’s growing maturity.

5 The events firm steered through covid 

Eventbrite urgently needed a tailored financing package to help it surmount a crisis. Francisco Partners stepped up

Deal: Eventbrite (Francisco Partners)

May 2020 Closed

$225m Deal size

Fund manager, other financiers, advisers and other parties: Francisco Partners was advised by Akin Gump Strauss Hauer & Feld; Kirkland & Ellis as legal advisers; Jefferies as financial adviser. Eventbrite was advised by Morgan Stanley & Co and Allen & Company as financial advisers; Latham & Watkins as legal adviser

Eventbrite, a global self-service ticketing and experience technology platform serving a community of nearly one million creators, urgently needed capital to assure equity investors that it had sufficient liquidity to address refunds for tickets to events cancelled due to covid-19.

Law firm Akin Gump advised fund manager Francisco Partners in connection with providing a $225 million senior secured term loan facility and the purchase of 2.5 percent of outstanding common stock from Eventbrite. Aspects of the transaction included converting Eventbrite’s prior credit agreement of a syndicated cashflow revolver and term loan with floating rate, cash pay interest; to a credit agreement containing an initial term loan facility, a delayed-draw term loan facility, call protection, fixed-rate cash pay interest and paid-in-kind interest with bespoke maintenance covenants and various changes to negative covenants, together with brand new equity documents.

Against one of the most dramatic backdrops in living memory – the pandemic – businesses, including the live-entertainment industry, were required to quickly adapt to a new normal in how they offered services to their customers. Eventbrite, whose creator-driven platform transacted more than 309 million tickets to approximately 4.7 million events in 2019 alone, was one of those businesses.

As part of the deal, Akin Gump advised long-time client Francisco Partners, a technology-focused private equity firm, in the $225 million senior secured term loan facility to support Eventbrite. Due to the unprecedented and unpredictable nature of covid-19 and its impact, there was a need for all parties to act quickly, and the Akin Gump deal team, led by partner Daniel Fisher, was able to do that: closing the transaction from start to finish in five calendar days and obtaining tight covenant restrictions while enabling Eventbrite to run its business in its ordinary course and potentially incur junior capital in the future.

The financing from Francisco Partners was significant in that it allowed Eventbrite the flexibility to manage through the various challenges imposed by covid-19, and directly contributed to Eventbrite’s plans for long-term growth and the return of in-person events around the world.

6 The deal that demonstrated a rare spirit

Metropolitan Partners Group devised a flexible and innovative financing package for a company specialising in American whiskey

Deal: Project Spirit (Metropolitan Partners Group)

Feb 2019 Closed with additional funding in 2020 and 2021

$22m Deal size. Initial $25 million commitment with upsizes totalling $100 million

Fund manager, other financiers, advisers and other parties: Metropolitan Partners Group (sole senior lender), Holland & Knight (legal)

Project Spirit operates several independent, growing spirit brands in the US and Europe. When it wanted to build its own inventory, Metropolitan Partners Group provided Project Spirit with an alternative capital solution to dilutive equity financing.

Metropolitan created an off-balance sheet financing deal to take advantage of the unique attributes of the ageing spirits asset class. It was able to value both the hard assets (bulk whiskey) and favourably priced forward-flow agreements to create a borrowing base that minimised the equity capital contributed by Project Spirit, while limiting exposure at a maximum of 70 percent of asset liquidation value.

Outside of the distilleries owned by multinationals, the independent whiskey industry is traditionally debt financed by certain regional banks at low advance rates relative to cost.

Traditional banks tend to miss a fundamental attribute of the asset class: the underlying barrel asset appreciates significantly as it ages due to the minimum age requirements before it can be utilised as bottled whiskey.

As long as age/recipe requirements are met, bulk whiskey in wooden barrels is fungible, and specific yearly vintages are discrete and interchangeable across numerous secondary buyers (and consumer brands). Additionally, the ageing spirits industry exhibits the unique dynamics of known future scarcity of bulk whiskey that is currently ageing due to increasing global demand
today.

Demand combined with regulated supply, asset fungibility and known sources of liquidity resulted in a novel lending thesis in late 2018: the industry will be undersupplied in the coming years, and due to barrel inventory ageing requirements, this undersupply cannot be immediately corrected via new increased production to make up for shortages of prior vintages.

This creates a window for a structured debt solution to ‘rent’ the equity upside opportunity in asset value while maintaining the downside protection of a fungible asset with predictable utility value and known organic sources of liquidity.

In the past three years, ageing spirits’ values have been driven higher than Metropolitan’s initial underwritten expectations due to a pandemic-driven alcohol consumption increase, ageing spirits’ value as an inflation-protected asset and supply chain issues having slowed planned capacity
increases.

Project Spirit was originally underwritten to a 15 percent interest rate and more than 35 percent profit share with expectations of a 22-24 percent internal rate of return across the $100 million of capacity over a three-year hold. Based on Q2 2022 marks, the vehicles are trending towards 32-34 percent IRR while maintaining an LTV of less than 50 percent (and trending to less than 33 percent with amortisation).

As the pricing trend continues to be favourable, Metropolitan has extended the initial loan maturity to allow the borrower time to further optimise asset appreciation and overall money multiple.

7  Going large before it became fashionable 

Blackstone Credit was one of the first lenders to start doing mega-unitranche deals. Stamps.com was a classic example

Deal: Stamps.com, now known as Auctane (Blackstone Credit)

Oct 2021 Closed

$2.6bn Deal size. Senior secured first-lien term loan

Fund manager, other financiers, advisers and other parties: Debt financing provided by Blackstone Credit, Ares, PSP and Thoma Bravo; JPMorgan Securities (exclusive financial adviser to Stamps.com), Proskauer Rose (legal counsel), Kirkland & Ellis (legal adviser for Thoma Bravo), Paul Hastings (legal adviser)

In July 2021, Blackstone Credit led the debt financing for Stamps.com, a leading provider of e-commerce shipping software solutions, to support the acquisition of the business by private equity firm Thoma Bravo, for approximately $6.6 billion. Blackstone Credit led negotiations and committed the majority of the transaction’s financing.

Stamps.com is a leading provider of e-commerce shipping software solutions to customers including consumers, small businesses, e-commerce shippers, enterprises and high-volume shippers. It offers solutions that help businesses run their shipping operations more smoothly under brand names including Stamps.com, Endicia and ShipStation. Towards the end of last year, Stamps.com announced it was rebranding as Auctane.

The deal demonstrated Blackstone’s ability to leverage its size (committing more than three times the next largest commitment), together with speed and certainty of financing. Furthermore, Thoma Bravo provided a significant equity cheque to help scale a business seen as a market-leader with attractive organic revenue growth rates and strong free cashflow generation.

The deal was the largest private unitranche debt financing at the time and ranked as the largest new direct loan ever in the private market. It was also a deal that reinforced Blackstone’s focus on the very large end of the market and was awarded deal of the year (Americas) in 2021 by Private Debt Investor.

The transaction was indicative of a shift in the market towards larger companies accessing private debt solutions – a trend that has grown and become a major talking point since – and the ability for transactions in the technology space to access direct lending. The deal catalysed a wave of transactions in the industry over the next nine months, many of which Blackstone Credit led or participated in.

As the Financial Times said at the time: “The deal underscores the massive firepower private credit funds have amassed and how they are putting that cash to work to finance bigger takeovers.” A strong case can be made that the transaction was a transformational moment in the private equity/debt markets and effectively created the large-cap private unitranche – making it a dominant force in the capital markets.

Before Stamps.com there had been only a few $1 billion-plus private unitranches completed. Since then, there have been approximately 40 and Blackstone Credit has gone on to lead many other private debt mega-deals such as software services firm Medallia, online education firm Cambium Learning and healthcare technology business Inovalon.

8 The solar firm that needed a fast mover 

MGG came up with the finance and speed of execution when Sunpro Solar attracted buyer interest

Deal: Sunpro Solar (MGG Investment Group)

Oct 2020 Closed

$51m Deal size. $51 million first-lien term loan; $30 million structured equity investment; $20 million asset-based lending revolver

Fund manager, other financiers, advisers and other parties: MGG Investment Group, Compass Group, Baker McKenzie, Lincoln International, McGuireWoods, Proskauer Rose

Sunpro Solar was nearing a deal to be acquired in late 2020 by an investor group led by a fundless sponsor. Due to transaction dynamics – a motivated but capital-constrained buyer – the sponsor was seeking a financing partner with the ability to conduct due diligence and make a significant investment in a compressed timeline. MGG provided debt financing in addition to investing in the company’s equity.

Headquartered in Mandeville, Louisiana and founded in 2015, Sunpro Solar (now ADT Solar) is the number one residential solar panel installation company in the Sun Belt region and a top-five installer in the US. It has offices throughout southeastern US and Texas and the engineering and installation of its solar panels are carried out by a team of 530 installers across 14 states, utilising topography and irradiance software to optimise energy production. It can take a new client from design to installation in 60 days.

In late 2020, Sunpro was nearing a sale. Its strong business performance, growth in the sector overall over the prior year, and increases in the share prices of publicly traded peers resulted in a higher-than-initially-anticipated equity price required to consummate the transaction. As such, the buyer was seeking a financing partner with the ability to make a significant investment under a compressed timeline.

MGG stepped in and offered an initial debt solution but recognised an opportunity to invest in the equity too. The firm provided a bespoke financing solution consisting of a $20 million revolver, a $51 million first-lien loan, and invested $30 million in equity.

MGG’s investment thesis was: market leader with significant brand recognition with a large addressable market (solar panels had less than 2 percent penetration rate); homeowner-orientated sales and engineering culture that allowed the company to cater to the specific energy needs and design preferences of its clients; strong financial performance.

The deal was an ESG/impact investment that met five of the sustainable development goals outlined by the UN. MGG has deployed approximately $2 billion in ESG and impact-related investments since inception.

Sunpro is heading the transition to clean renewable energy by enabling the use of residential solar. In December 2021, ADT Inc, a leading brand in home and small business security, acquired Sunpro for $825 million in a combination of $160 million in cash and the remainder in ADT stock. The cash proceeds paid off MGG’s debt, yielding a 37 percent gross unlevered IRR and a 1.49x multiple of invested capital. Further, the total return on MGG’s equity investment is in excess of 400 percent.

9 ESG placed centre stage 

When Tikehau backed TowerBrook’s purchase of a stake in Talan, it took the opportunity to introduce an innovative ratchet to the financing

¢ Deal: Talan (Tikehau Investment Management)

Nov 2020 Closed

$123.5m Deal size. $125.5 million unitranche and €60 million acquisition facility

Talan is a European IT services player founded in 2002, focusing on operations and consulting. The shareholder structure was comprised of three co-founders and a sponsor. The sponsor wanted to exit its position and mandated Natixis to find a new financial partner. TowerBrook reached an agreement to purchase close to 50 percent of the company and Tikehau Investment Management was selected to provide the acquisition financing.

Tikehau’s corporate lending platform originally financed Talan in 2014, with a €25 million term loan C, when its revenue stood at €71.6 million and EBITDA at €8.3 million. Fast forward to 2020, the company had grown to be eligible for a €123 million unitranche financing (with target IRR of 7 percent), with revenues of €251.6 million and an adjusted EBITDA of €26 million.

Overall, Tikehau’s broad platform played an essential role in providing the capital and expertise to allow Talan to grow over many years and through numerous products.

Moreover, Talan was the first ever unitranche financing to include an ESG ratchet and was the first time an ESG ratchet was introduced into a transaction’s legal documentation. Tikehau has stated that it believes ESG ratchets are an opportunity to show that sustainability and performance are interlinked.

For Talan, the company’s top line was driven by organic growth. Consequently, customer satisfaction, human resources management and innovation were essential. Therefore, Tikehau set a number of criteria, including increased employee training and greater diversity at management level.

The targeted ratchet reductions for these points are: Criteria 1 – Share of group employees engaged in training programmes; Baseline – 37 percent; year one 40 percent; year two 43 percent; final year 60 percent; Criteria 2 – Share of women among group managers; Baseline – 22 percent; year one 24 percent; year two 26 percent; final year 36 percent.

Tikehau says it is working closely with the company to encourage best practices and support the ESG-related targets. ESG ratchets are now becoming a market norm, no longer separate from financial criteria. Tikehau says it has used this deal as a reference for other transactions, as well as to work closely with industry organisations to encourage innovation and roll out the mechanism further. The head of ESG for Tikehau’s private debt team was recently appointed as a member of the UN PRI’s Private Debt Advisory Committee, which is focused on creating greater synergies and collaboration across the private credit industry.

10 The US/EU unitranche

The Ardonagh Group unitranche was groundbreaking for its size but also for some complex aspects of structuring and documentation

Deal: The Ardonagh Group (Ares Management)

Jun 2020 Closed

$2bn Deal size

Fund manager, other financiers, advisers and other parties: Ares Management Corporation, CDPQ, HPS, KKR, Owl Rock and Oaktree (fund managers); Proskauer; Kirkland & Ellis; Milbank (legal adviser)

Just before the pandemic, The Ardonagh Group, one of the UK’s biggest privately owned insurance brokers, sought to expand the footprint of its platform, and accessed the private credit market as a means to do so. The deal started in-person just before the pandemic, and all participants had to transition swiftly to remote working.

In the UK insurance industry, stories are rarely bigger than the news of Ardonagh, the UK’s largest independent insurance brokerage, swooping for the name behind the biggest broker network in the country, Bravo Group.

In 2020, Ardonagh secured the “largest-ever” unitranche loan at the time, led by Ares Management. It originally consisted of £1.875 billion ($2.1 billion; €2.1 billion) in unitranche loans and Ardonagh subsequently raised fresh capital from the lenders under the documentation to fund its expansion and bolt-on plans. At the time, it was the largest unitranche financing globally and, with several upsizes since, is still one of the top five largest private credit deals ever.

As borrowers have pushed for larger scaled financial solutions, private credit funds have executed ever-larger deals. However, prior to this transaction, corporates and private equity houses had mostly nibbled at the edges of Europe’s syndicated loan and high-yield bond markets with direct lending clubs for jumbo deals more common in the US.

In addition to its size, the deal had the added complexities of combining European loan and US high-yield covenants in one agreement and the private credit element interacting with the public markets through interlacing senior unsecured notes (as junior debt) into the same capital structure as the unitranche facility – something never seen before in the European finance market.

This was divergent from typical private credit deals, where there is only a singular party on the lending side, and as the senior unsecured notes required interaction with the public markets, the entire deal was subject to the movements and requirements of the market. This relationship between the public and the private credit market was novel and made it a “private credit plus” deal. This meant there was no standard precedent for documentation or approach, requiring flexibility and innovative thinking from those involved.

The deal was a step forward for direct lenders as they continue to leverage gaps in the market and challenge investment banks. Direct lending funds have attracted a flood of investor money from pension and sovereign wealth funds seeking higher returns than those available in the public markets. This deal underlined the abilities of private credit to compete with high-yield and large-cap investments from traditional sources.