(Bloomberg) -- KKR & Co.’s capital markets arm led a private credit financing for USIC Holdings, which the public utility provider used to repay broadly syndicated debt, according to people familiar with the matter.
The deal for USIC, which is owned by private equity firms Partners Group Holding AG and Kohlberg & Co., included a $1.4 billion term loan, alongside a delayed draw term loan and revolver, said the people, who asked not to be named discussing a private deal.
The financing priced at 5.25 percentage points over the Secured Overnight Financing Rate and was issued at a discounted price of 99 cents on the dollar. Leverage, the ratio of debt to earnings, on the deal was about 7 times, the people said.
In going the private credit route, USIC was able to include a payment-in-kind component, allowing it to defer cash interest payments. It was also covenant-lite, meaning that the deal did not include maintenance covenants.
USIC had around $1.5 billion of broadly syndicated debt outstanding before this deal, which was trading at around 90 cents to the dollar at the beginning of September, according to data compiled by Bloomberg.
KKR, Kohlberg and Partners Group declined to comment, while USIC did not respond to a request for comment. 9fin first reported some of the details of the financing.
The deal is the latest instance of companies turning to private credit lenders to finance out of broadly syndicated deals. In May, KKR and Apollo provided a private loan of more than $1 billion to private equity-owned ASC Engineered Solutions, which it used to repay broadly syndicated loan.
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