We are excited to introduce ourselves to you and our unique way of working together. In order to provide you with the optimal experience, how would you describe yourself?
Flexible, creative financing solutions
Direct lending is an avenue for companies like yours to access capital as an alternative to the syndicated loans or senior floating-rate capital traditionally provided by banks. Direct lending loans are provided by "non-bank" lenders, such as institutional investors.
Direct lending loans are primarily first lien, senior secured floating-rate loans, but can also be second lien, revolvers, or accordion/delayed-draw facilities. They have flexible amortization profiles and final maturities that usually range from 5 to 6 years.
The direct lending market has become a permanent source of capital for borrowers. It is largely a leveraged buyout-driven, sponsor-led market, but relies on private placement-style credit and terms underwriting.
Hear Matt Harvey, Jeff Dickson, and Sarah Bittner provide an overview of Direct Lending.
Typical size, structure, uses, and benefits ▼
- $25 million - $400 million
- Recapitalizations/dividend recapitalizations
- Shareholder buyouts
- Generational transfers
- Non-sponsored management buyouts
- Sponsored leveraged buyouts
- Cross-border financings
- Floating rate
- Revolvers, accordions, and/or delayed-draw term loans
- 1%-10% yearly amortization with an excess cashflow sweep
- Typical maturities of 5-6 years
- Ability to do multi-currency, cross-border transactions
- Flexible prepayment terms
- Relationship-focused capital provider
“The market can be very transactional. It’s short term and somewhat fleeting in terms of relationships – that's not our approach. We take a longer-term perspective.”
Matthew Harvey, Managing Director
Prudential Private Capital
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