Private Lenders Poised to Step In as Trump Tariffs Fuel Disruption in BSL Market

Reporting: Paola Aurisicchio
Despite President Donald Trump’s announcement that he would pause his tariff policies for 90 days, the private credit market will reap the benefit of increased volatility and uncertainty in the debt capital markets, market sources said.

“There is a lot of uncertainty right now, but that is why it is important to have patience and long-term lenders so periods of volatility do not hurt our business,” said one of the sources, a private credit manager. “Obviously there is going to be a tariff impact that we are assessing in our portfolio.”

For example, the $7.7 billion acquisition of data and analytics company Dun & Bradstreet by private equity firm Clearlake Capital Group faces uncertainty around its $5.75 billion 364-day bridge facility, according to two sources familiar with the situation. The bridge loan was committed by a pool of banks to support the acquisition, which was announced on March 24 and is expected to close in the third quarter, pending shareholder and regulatory approval.

Concerns around tariff policy and the fact that the bridge loan does not convert to permanent financing could complicate the financing path. A source close to the deal suggested that private credit lenders may be encouraged to step in between signing and closing, which could affect the debt financing aspect of the transaction.

According to a finance lawyer, a trade war “could give private credit providers the opportunity to perhaps recapture some market share from the broadly syndicate market as the BSL market is heavily disrupted by what happened.”

The same lawyer said that certain processes, especially refinancings that are expected to be launched in the BSL market, will either be significantly delayed until the situation stabilizes or they might change route to the private credit market.

Financial advisors to Clearlake in the Dun & Bradstreet deal include Morgan Stanley, Goldman Sachs, JPMorgan, Rothschild, Barclays, Citi, Deutsche Bank, Santander and Wells Fargo. Ares Credit Funds and HSBC also participated in the committed financing for the transaction.

Octus, formerly Reorg, reported on March 25 that price talk on a $1.1 billion seven-year term loan B financing H.I.G. Capital’s acquisition of Converge Technology Solutions was at SOFR+425 bps and 98-98.5 OID. Commitments were due April 1. The group of banks led by Bank of Montreal has now postponed the term loan sale, Bloomberg Lawreported on April 7.

On April 4, the LSTA Leveraged Loan Index was indicated at 95.98, a notable decline after Trump announced on April 2 tariffs across more than 100 U.S. trading partners.

“It’s a monumental disruption to businesses, and I think that everyone is recalibrating what terms and leverages are,” said a private lender.