Global private investment firm KKR & Co’s capital markets division has spearheaded a $1.4bn private credit financing deal for USIC Holdings, a public utility provider owned by private equity firms Partners Group Holding AG and Kohlberg & Co, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as revealing that the funding, which was used to repay broadly syndicated debt, involved a term loan, a delayed draw term loan, and a revolving credit facility.
The $1.4bn loan was priced at a margin of 5.25 percentage points over the Secured Overnight Financing Rate (SOFR) and was issued at a slight discount of 99 cents on the dollar. The deal’s leverage ratio—debt to earnings—was approximately seven times, according to insiders.
By opting for private credit financing, USIC was able to include a payment-in-kind (PIK) component, allowing for the deferral of cash interest payments. The agreement was also covenant-lite, meaning it lacked stringent maintenance covenants typically required in such deals.
Before this transaction, USIC had around $1.5b n in outstanding broadly syndicated debt, which was trading at around 90 cents on the dollar at the beginning of September, as per Bloomberg data.
