“No Longer is the Large Deal Just the Provenance of the Banks”
(7 March 2023 – United States) Private credit groups including Apollo, Ares and Blackstone are poised to write the largest direct loan on record as they continue to muscle in on a lucrative business traditionally dominated by Wall Street banks.
The non-bank lenders are increasingly confident they can edge out investment banks including JPMorgan Chase and Goldman Sachs in a deal to fund Carlyle’s acquisition of a 50 per cent stake in healthcare analytics company Cotiviti, according to five people briefed on the transaction speaking to the Financial Times.
The $5.5bn loan to help buyout group Carlyle acquire the stake from rival Veritas Capital would be the biggest of its kind and could be announced in the coming days or weeks, the people added. The deal values Cotiviti at roughly $15bn.
It underscores the growing power of private credit providers in the wake of the global financial crisis, which ushered in a new era of tougher capital requirements for banks that made it harder for them to fund risky takeovers.
The trend has only accelerated in recent months after gyrating bond markets left banks struggling to offload debt they provided to fund big takeovers, including Elon Musk’s buyout of Twitter.
“No longer is the large deal just the provenance of the banks,” said Kipp deVeer, head of credit at Ares.
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