Article
New CD&R- and TPG-Backed Private Credit Loan Offered to CLO Lenders in Landmark Transaction
CD&R and TPG are offering a new $3 billion unitranche private credit facility for Covetrus, an animal health technology company, to existing holders of the broadly syndicated loan, including CLOs, according to sources. CLO holders will be allowed to roll their existing stakes into a private credit facility, marking one of the first instances of this type of transaction.
Existing lenders are currently offered the opportunity to be taken out at par or roll their holdings to a higher coupon loan. The existing term loan was paying SOFR+500 bps, while the new unitranche facility would step up to SOFR+650 bps. While a number of BSL deals have recently been refinanced by private lenders, sources say this will mark the one of the first instances of a BSL CLO having the option to own an outstanding private credit loan.
While the credit is marketed to CLOs, sources tell Octus that commitments for the loan are due today, Friday, Jan. 30, and questioned whether CLO managers would have enough time to diligence the transaction before choosing to roll.
One CLO manager told Octus that they believed that most existing CLO lenders would choose to be paid out at par in light of the loan’s B3 rating. Covetrus’ loan consistently traded in the low to mid-90s, and was last quoted near par.
The manager added that due to the private rating of the loan, the manager-specific deal documents would determine whether or not a rolled stake could be included in the portfolio. Without the correct stipulations in the CLO indenture, managers would likely be unable to add the name in their portfolio. However, for those with the correct documentation, it would be possible to add the loan, other sources told Octus.
The deal, which refinances Covetrus’ existing debt and is intended to fund an acquisition, is being marketed off of over $600 million in EBITDA, more than double the current projections for Covetrus’ 2026 EBITDA of $260 million, inclusive of synergies, sources added.
Existing lenders on the deal include Carlyle, UBS Asset Management, Anchorage, Octagon and AGL. A full list of Covetrus’ CLO lenders can be found HERE.
Covetrus, CD&R and TPG did not respond to requests for comment.
This publication has been prepared by Octus Intelligence, Inc. or one of its affiliates (collectively, "Octus") and is being provided to the recipient in connection with a subscription to one or more Octus products. Recipient’s use of the Octus platform is subject to Octus Terms of Use or the user agreement pursuant to which the recipient has access to the platform (the “Applicable Terms”). The recipient of this publication may not redistribute or republish any portion of the information contained herein other than with Octus express written consent or in accordance with the Applicable Terms. The information in this publication is for general informational purposes only and should not be construed as legal, investment, accounting or other professional advice on any subject matter or as a substitute for such advice. The recipient of this publication must comply with all applicable laws, including laws regarding the purchase and sale of securities. Octus obtains information from a wide variety of sources, which it believes to be reliable, but Octus does not make any representation, warranty, or certification as to the materiality or public availability of the information in this publication or that such information is accurate, complete, comprehensive or fit for a particular purpose. Recipients must make their own decisions about investment strategies or securities mentioned in this publication. Octus and its officers, directors, partners and employees expressly disclaim all liability relating to or arising from actions taken or not taken based on any or all of the information contained in this publication. © 2026 Octus. All rights reserved. Octus(TM) and the Octus logo are trademarks of Octus Intelligence, Inc.