Private Credit Firms Pitch More Leverage to Win Over Deals

Finding steep competition from the broadly syndicated market, private credit firms are offering one benefit to potential borrowers: leverage.

Direct lenders are pitching higher leverage ratios as a sweetener for deals, particularly for companies owned by private equity firms. Tacking on more debt gives companies flexibility to make acquisitions, and can fund a dividend payout to shareholders, also known as a dividend recapitalization.