The private credit landscape continues to evolve amid economic headwinds, underscored the sector’s adaptability, the researchers at PitchBook have noted.
Private credit, once a niche alternative to traditional lending, has surged as a go-to financing mechanism for middle-market companies grappling with syndicated loan market disruptions.
This overview from PitchBook draws on fresh deal flow, quantitative insights, and expert perspectives to illuminate how direct lenders are stepping in where banks falter, particularly in the wake of tariff policies and macroeconomic jitters.
A standout transaction exemplified private credit’s edge in high-stakes refinancings.
ABC Technologies, a key player in automotive components and backed by Apollo Global Management and Oaktree Capital, finalized a $2.3 billion loan package to overhaul lingering syndicated debt.
The structure featured a $1.6 billion senior term loan alongside a $675 million junior tranche, orchestrated primarily by HPS Investment Partners, with Apollo contributing to the latter.
This move traces back to a turbulent March 2025 launch of a $900 million term loan B, aimed at funding the acquisition of TI Fluid Systems.
Market chaos erupted shortly after the Trump administration’s April 2 tariff rollout, leaving the loan unsold and the deal to close sans syndication.
Industry observers point to private credit’s streamlined execution as a boon—deals close on preset terms, sidestepping syndication delays.
With tariff effects easing, broader loan market liquidity is rebounding, yet private providers maintain a premium for certainty.
Beyond this marquee event, PitchBook noted that deal activity buzzed with refinancings and growth financings tailored to middle-market needs.
Liquid Tech Solutions, a buyer in the industrial fluid management space, kicked off an $807.5 million term loan B and delayed-draw facility to swap out prior private credit arrangements.
Arranged by Antares Capital with Ares Capital Management, Golub Capital, and Citizens Financial Group as leads, the seven-year instrument boasts six months of call protection at 101 and a leverage cap.
A $125 million asset-based revolver rounds out the package, signaling confidence in operational cash flows despite prior holdings by PennantPark funds as of mid-2025.
In the tech-enabled services arena, Sapiens International Corporation (Nasdaq: SPNS), a provider of insurance software, locked in a $1.145 billion debt stack to bolster Advent International’s $2.5 billion buyout, slated for late 2025 or early 2026.
Comprising an $865 million senior term loan, a $150 million flexible facility for expansions, and a $130 million bridge to a revolver, the financing drew from heavyweights like Goldman Sachs Asset Management, Blackstone Credit, and HPS.
This underscores private credit’s role in leveraged buyouts, where speed trumps traditional routes.
Chemical and manufacturing sectors also saw vigor.
Vantage Specialty Chemicals tapped Apollo, Silver Point Capital, and Oak Hill Advisors for $900 million to retire maturing obligations, including an $88.8 million revolver and an $835 million covenant-lite term loan from 2023.
Priced at SOFR plus 475 basis points and tracked in the Morningstar LSTA index, the debt faced headwinds; S&P downgraded it to CCC+ in May amid refi risks and economic fog.
Meanwhile, North American Rail Solutions, under DFW Capital Partners, drew a $770 million senior facility from MidCap Financial to refuel post-acquisition and liquidity needs, closing late August after snapping up ZA Construction.
Insurance and media rounded out the slate.
McGill & Partners, a brokerage firm, secured $300 million from Morgan Stanley Private Credit, Permira Credit, and Bridgepoint to refinance and extract dividends, while earmarking funds for AI-driven hires and tech upgrades— all while keeping leverage in check under Warburg Pincus stewardship.
Artivion Inc. (NYSE: AORT), focused on medical devices, added a $150 million delayed-draw term loan to its $350 million facility via Ares, trimming pricing to SOFR plus 475 and pushing maturity to 2031.
Fetch, the rewards platform, upsized its senior debt to $110 million with Morgan Stanley to fuel partnerships, building on 2024’s base.
Angel Studios (NYSE: ANGX), the indie film outfit, grabbed a $100 million line from Trinity Capital to clear obligations and shore up cash ahead of a SPAC merger.
Data paints a broader picture: Middle-market private credit issuance climbed 12% week-over-week, hitting $4.2 billion across 15 deals, per aggregated trackers.
Leverage multiples averaged 5.2x EBITDA, down from 5.8x last quarter, reflecting lender caution.
Spreads held steady at 650-750 bps over SOFR, with 70% of volume in unitranche structures—ideal for speed in sub-$1 billion borrowers.
Experts weigh in on trends:
“Private credit’s bifurcation is accelerating—sponsors favor it for non-sponsored deals amid bank retrenchment,” notes a HPS strategist.
Yet risks loom, including rising defaults in cyclical sectors, projected at 4.5% for 2026.
Features spotlight unitranche’s dominance, comprising 55% of new lending, and the tariff thaw’s potential to unlock $50 billion in stalled syndications.
To recap, this latest update from PitchBook reveals a private credit ecosystem thriving on agility, even as middle markets navigate uncertainty.
With $1.5 trillion in dry powder, direct lenders are poised to capture more share, offering solutions that banks might not be able to match.