Thoma Bravo Turns Back to Wall Street to Refinance $1.05bn Private Loan

Thoma Bravo is a fan of multibillion-dollar private loans to fund buyouts — the kind that bypass Wall Street’s syndicated-lending desks altogether. But it’s not turning its back on banks for good.

The private equity firm has tapped a group of lenders led by Bank of America Corp. to refinance a unitranche loan for software company ConnectWise LLC. It’s a win for a leveraged loan market that’s lost out on a slew of debt deals this year for big acquisitions that were funded by the private credit market — including some inked by Thoma Bravo itself.

The sponsor skipped banks when getting $2.6bn of debt financing for its buyout of Stamps.com in July, and for a $2.3bn loan for the buyout of Calypso Technology Inc. in April. When it turned to direct lenders for its acquisition of ConnectWise in 2019, these loans rarely exceeded $500m.

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Buyout firms are increasingly looking to private credit to fund larger and larger transactions, lured by greater expediency and generous terms. Direct lenders are sitting on a record $364bn of cash ready to put to work, allowing firms like Owl Rock and Ares Management — often teamed up in small groups — to fund multibillion-dollar deals that just a few years ago were exclusively the territory of the world’s biggest investment banks.

A representative for Thoma Bravo didn’t immediately respond to a request seeking comment.

The red hot syndicated loan market, however, also has benefits — lower borrowing costs being one of them in certain cases. ConnectWise meets with investors on Monday for the new $1.05bn leveraged loan sale.

Source: Finance Yahoo

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