Funding group Sixth Road Companions prolonged its latest dealmaking spree, main a $2.3bn mortgage to assist fund the $6.4bn leveraged buyout of satellite tv for pc operator Maxar Applied sciences, mentioned folks with information of the transaction.
The financing package deal comes simply days after Sixth Road led a $2.6bn mortgage to again Thoma Bravo’s $8bn buy of enterprise software program supplier Coupa Software, underlining the agency’s deep push into credit score markets and its capacity to fill a void left by banks within the leveraged buyout business.
Sixth Road and a gaggle of different direct lenders beat out a competing mortgage supplied by a lot of Wall Road banks, the folks added. The takeover of Maxar by personal fairness group Creation Worldwide was introduced on Friday, however particulars of the debt financing had not been disclosed.
Sixth Road has turn into one of many go-to lenders for buyouts, gaining share at a time when many regulated banks have been cautious of extending dangerous company loans. The San Francisco-based group in late October additionally participated in a personal mortgage to fund Blackstone’s buy of a majority stake in Emerson Electrical’s local weather applied sciences enterprise.
Its presence has been important to non-public fairness teams in the course of the latest downturn, because the Federal Reserve’s marketing campaign to aggressively elevate rates of interest froze some credit score markets.
Banks sometimes agree to supply funding for offers, then promote the debt on to different buyers. If demand for leveraged loans falls between the time when a transaction is agreed and when it’s accomplished, the banks are both pressured to promote at a loss or maintain the loans till markets enhance.
Many Wall Road lenders have pulled again from buyouts consequently. A gaggle of banks that features Morgan Stanley and Financial institution of America continues to be sitting on $12.7bn of debt supplied to Elon Musk for his buy of Twitter, with buyers displaying little curiosity with out steep reductions.
Sixth Road was launched in 2009 by a coterie of Goldman Sachs alumni inside TPG, who ran the personal fairness agency’s credit score enterprise. In 2020 it was spun-off from TPG and it has grown quickly, managing greater than $60bn immediately.
