Private Equity Paying Up for Risky Loans as Wall Street Leashed

To see just how much of a game changer regulators’ crackdown on risky lending has been, take a look at a loan Vista Equity Partners arranged for one of its companies this year.

When the Austin-based private-equity firm shopped for a lender to arrange more than $200 million for tax-software firm Sovos Compliance, it passed on three banks, including one of the biggest underwriters of such debt, according to Kevin Sofield, Vista’s director of capital markets.

Instead, it opted to go with Golub Capital, a Chicago-based asset manager that charged a higher rate but allowed Vista to load the company ...