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Wells Fargo, Centerbridge Direct Debt Deals Reach $2.8 Billion

A Wells Fargo & Co. branch. (Michael Nagle/Bloomberg)

(Bloomberg) -- A venture between Wells Fargo & Co. and Centerbridge Partners dedicated to direct lending has arranged $2.8 billion in deals since its formation a year ago, according to a statement seen by Bloomberg News. 

The business development company, known as Overland Advantage, led six deals alongside Wells Fargo, including a $74 million second-lien credit facility for MaxiTransfers and a $215 million deal for FFF Enterprises Inc. Other deals include financings for Continental Services, Capital Vacations, SGA Dental Partners and TriWest Healthcare Alliance Corp.

Wells Fargo is one of a handful of banks that have teamed up with direct lenders over the last year to take advantage of the $1.6 trillion private credit industry. While these partnerships have taken different forms, market participants have eagerly awaited news of how they’re faring. 

Overland is managed by an entity controlled by Centerbridge and which Wells Fargo has a significant minority investment in. The fund was targeting at least $5 billion, including $2.5 billion in equity commitments, Bloomberg previously reported. It’s focused on making senior secured loans to non-sponsor-backed middle-market firms in North America and took around two years to get off the ground before it was launched. 

“If you are a non-sponsor owned company in the middle of America, you don’t know private credit the same way you might as a financial sponsor on Park Avenue or Hudson Yards, so we are providing a solution that wasn’t readily available before,” said David Marks, an executive vice president at Wells Fargo Commercial Banking. 

Wells typically refers opportunities to Overland and Centerbridge underwrites the financing, though referrals can go both ways. In some cases, the deals consist of hybrid financings, where Wells Fargo provides a revolver and Overland supplies a term loan. 

“Overland and Wells Fargo agented all six of our deals, which is unusual for a startup where you are typically buying pieces in other deals in order to deploy,” said Gavin Baiera, CEO of Overland and senior managing director at Centerbridge.

“There’s always things that you want to improve on, but things are very much working the way that we envisioned them to work,” Baiera said. He expects deal flow for the fund, which closed its first deal in June, to ramp up over the course of this year.

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