Private credit lenders are in talks to provide a $1.3 billion loan for L Catterton's acquisition of healthcare platform Fullscript, after the deal failed to attract enough interest in the leveraged loan market. The acquisition, expected to close Tuesday, will see L Catterton, backed by Altas Partners, take a majority stake from HGGC and Snapdragon Capital Partners. Morgan Stanley led the original underwriting but is now off the hook as private lenders step in to replace bank commitments, which were priced at 4 percentage points over the benchmark rate.
Apollo Global Management and Blue Owl Capital hold existing private credit debt in Fullscript at 4.5 percentage points over benchmark. The unusual shift highlights recent market volatility driven by AI-induced selloffs and US election uncertainty, as private credit increasingly steps in where traditional lending falters. Representatives from Morgan Stanley, Apollo, Altas, Blue Owl, L Catterton, and Fullscript declined or ignored comment.
The pivot underscores how sponsors may switch financing routes once deals are already committed, a rare but telling sign of stressed market conditions.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing