Large deal drought drags private credit LBO financings down 21% YoY

A large contingent of the private credit market makes its living hunting mega-LBOs. But behemoth buyouts are proving elusive this year, with direct lending LBO volume posting multi-year lows.

LCD has not tracked a single LBO financing over $2 billion by direct lenders since early March. As a result, year-to-date estimated direct lending LBO loan volume, at $30.2 billion, is running 21% behind last year's pace, while deal count, at 92, is trailing by 17%.

LCD data presented in the Q2 US Private Credit Wrap, published today, showed that the steepest fall in activity was among those borrowers backed by private equity firms, which are struggling to find appealing exit opportunities and were reluctant to transact in the second quarter.

Direct lenders have financed just 36 LBOs so far in Q2 with an estimated combined volume of $7.9 billion, marking a nearly six-year low for LBO financing activity.

The most recent mega-buyout in private credit was Thoma Bravo's acquisition of third-party logistics company WWEX Group, backed by over $5 billion in unitranche financing. That financing, which was finalized late in Q1, was agented by Ares and provided by a club of 33 lenders.

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Fuente original: Yahoo Finance (https://finance.yahoo.com/markets/stocks/articles/large-deal-drought-drags-private-185612689.html)