Banks Are Now Targeting Some of Private Credit’s Riskiest Debt

Investment banks including Goldman Sachs Group Inc. are pitching broadly syndicated refinancings of some of the riskiest types of private credit, in the latest sign that Wall Street is trying to poach back business from direct lenders.

Bankers in Europe are speaking with buyout firms about options for private payment-in-kind debt their companies took on when broadly syndicated markets were much more volatile and expensive. Now that conditions have improved, institutional lenders are becoming increasingly assertive.

“A lot of sponsors have been doing PIK but in the private market,” said Luke Gillam, co-head of EMEA credit capital markets at ...