Vista Equity Partners-backed Finastra Group Holdings is considering a $4bn debt refinancing, with Morgan Stanley evaluating both syndicated loan and private credit options.

The discussions remain in early stages, but Finastra’s improved financial performance has broadened its financing opportunities.

In 2023, Finastra completed a $5.3bn private credit transaction, one of the largest of its kind, led by Oak Hill Advisors. The deal included support from Blue Owl Capital, which you can meet at the CEE Private Equity Conference in Warsaw, Ares Management, HPS Investment Partners, and KKR, along with $1bn in preferred equity from Vista. At the time, the financing carried a steep 7.25 percentage point spread over SOFR, making it one of the most expensive transactions in the market.

The refinancing comes amid heightened activity in the credit markets, with banks aggressively competing with private lenders. So far this year, more than $300bn in US leveraged loans have been issued, primarily for repricing and refinancing. In 2023, direct lenders refinanced $34bn in syndicated loans, while $30bn in private credit transitioned back to bank financing.

Beyond refinancing, Finastra continues reviewing strategic options. In September, the company mandated Evercore to explore a sale of its capital markets division. In January, it appointed Chris Walters as CEO, citing his track record of driving operational efficiencies in financial services.

As refinancing volumes accelerate, Finastra’s next move could offer a key indicator of the shifting balance between private credit and traditional bank lending.

Source: Private Equity Wire