Companies with a mountain of debt that comes due in the next three years are turning to the burgeoning $1.5tn private credit industry to avoid defaults and messy bankruptcies, taking out high-cost loans they might otherwise fail to land from traditional investors in US debt markets.
KKR-owned veterinary hospital operator PetVet is the latest large business to hold discussions with private credit funds as it looks to refinance more than $3bn in loans, said people with knowledge of the matter.
A refinancing for the highly-indebted company would help extend its company’s debts, which begin maturing in 2025. KKR, the private equity behemoth, could still attempt to refinance the debt through the syndicated leveraged loan market, particularly if conditions in financing markets improve, people involved in the discussions cautioned. KKR declined to comment.