Actionable Ideas for Companies and Sponsors

Borrowers Shift from Club Deals to Syndicated Deals

As the leveraged loan market remains wide open, private equity sponsors are comparing financing options available to borrowers within the private credit market versus the syndicated loan market. The strength of the syndicated market has led to increasingly issuer-friendly terms, and some borrowers are choosing to refinance their club deals in the syndicated market due to the strong demand from institutional investors. Entering the syndicated market is often viewed positively by private equity sponsors as it better positions borrowers for future sell-side transactions and typically results in more aggressive financing packages from potential buyers. Syndicated loans also provide more flexible capital structures for businesses as they grow.

In March 2021, Jefferies allocated a first lien term loan and a delayed-draw first-lien term loan for EyeSouth to refinance its existing privately-placed term loan and finance near-term acquisitions. EyeSouth is a provider of practice management services to a network of affiliated ophthalmology practices, specializing in essential treatments for eye health conditions. The $375 million first lien term loan and the $65 million delayed-draw first lien term loan priced at L+450 / 0.75% Floor / 99.75 OID.