Mercer Advisors Refinances Private Debt with $1.65 Billion Leveraged Loan
Wealth management firm Mercer Advisors Inc., owned by private equity firm Oak Hill Capital, has priced a new seven-year leveraged loan of $1.65 billion to refinance existing private credit debt at lower interest rates. The refinancing is expected to reduce borrowing costs by 1.75 percentage points and save the company approximately $29 million annually. Mercer will use proceeds from the loan—offered with a spread of 2.75% over the floating-rate benchmark—to replace higher-cost private credit debt, which was provided by lenders including KKR & Co., Ares Management Corp., BlackRock Inc., and Apollo Global Management’s MidCap Financial fund. This move is part of an industry trend where companies are increasingly refinancing expensive private credit loans with cheaper capital from the bank loan market. So far this year, $19.5 billion in debt has moved from private credit to syndicated markets, compared to just $9.2 billion in the opposite direction. Mercer’s CFO noted that lower borrowing costs will provide greater flexibility for client services and strategic investments such as acquisitions. The broader shift reflects a cost-of-capital-driven decision by borrowers who can access more favorable terms through traditional bank loans.
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Topics: Leveraged Loans Private Credit Refinancing Wealth Management