{
  "id": 6853934,
  "title": "Private credit loses its edge in the battle for PE borrowers",
  "url": "https://urgent.news/2026/09/10/private-credit-loses-its-edge-in-the-battle-for-pe-borrowers",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-09-10T21:32:50.000Z",
  "source": {
    "name": "Yahoo Finance",
    "slug": "yahoo-finance",
    "url": "https://finance.yahoo.com/markets/options/articles/private-credit-loses-edge-battle-213250231.html"
  },
  "original_language": "en",
  "account": "In 2024, Catalent obtained a $4.2 billion term loan from direct lenders to fund its merger with Novo Holdings. Subsequently, the pharmaceutical firm refinanced with a $4.1 billion syndicated loan, which is expected to reduce its annual interest expense by approximately $100 million. This development underscores a transformation occurring in the leveraged finance sector, as outlined in a recent report from DC Advisory. The reduction in private credit's pricing advantage, primarily driven by redemptions by retail investors, is providing banks with an opportunity to secure refinancing business. The challenges faced by the retail private credit market indicate no signs of improvement. All major direct lenders, including Ares, Apollo, and KKR, which also operate business development companies, are under pressure to repay investors. A recent report by PitchBook LCD shows that investors in Cliffwater's direct lending interval fund sought to withdraw 16% of their shares in the third quarter, down from 17% in the previous quarter. Blackstone's BCRED reported Q3 redemption requests of 10%, consistent with the prior quarter. As a result of these outflows, direct lenders with significant retail exposure are reassessing their portfolio construction and sizes, leading to decreased lending and making the syndicated loan market relatively more appealing. In July, aerospace company FDH Aero secured a $1.1 billion term loan for its acquisition by Bain Capital, following a previous financing by direct lenders. The shift is also evident in the cost of newly issued loans. In the three months ending August 31, new-issue private credit loan spreads averaged 502 basis points, up from 475 basis points in Q1. These spreads now account for 52% of all sponsor-backed direct lending deals, up from 25% in the first quarter. The gap between syndicated loans and private credit loans issued in the US widened to 162 basis points in the three months to August 31, about 39 basis points higher than in the first quarter, according to the LCD.",
  "summary": null,
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}