Direct lenders including PSP Investments, Oaktree Capital Management, Franklin Templeton, and several other private credit funds have acquired about $2bn of subordinated debt tied to Blackstone and TPG’s buyout of women’s health specialist Hologic, Bloomberg reports.

The second-lien tranche, part of a wider $12.25bn financing package, pays 5 percentage points over the floating benchmark and was issued at 99 cents on the dollar. Other investors in the deal include Palmer Square Capital Management, Oak Hill Advisors, Sona Asset Management, Lord Abbett, and Blackstone’s own credit arm.

The transaction underscores how private credit has become a key source of capital in large-scale buyouts, taking on riskier debt layers that offer higher returns. Banks and direct lenders have increasingly collaborated on marquee transactions as sponsors seek deeper pools of capital. Recent examples include CapVest’s financing for Stada and Sycamore Partners’ take-private of Walgreens Boots Alliance.

Citigroup, Barclays, RBC Capital Markets, and Bank of America arranged the Hologic financing. However, Blackstone and TPG sourced buyers for the subordinated tranche themselves, reducing fee income for the banks. The senior portions of the $12.25bn package, worth about $9.5bn, could be syndicated as soon as January.

Blackstone and TPG agreed to acquire Hologic for as much as $18.3bn last month. Abu Dhabi Investment Authority and Singapore’s GIC will also take minority stakes in the medical device and diagnostics company.

Representatives for the lenders and banks declined to comment.

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