Private Equity Borrows $94 Billion in 2025 to Fund Payouts (1)

Private equity-owned companies borrowed $94 billion in leveraged loans and high-yield bonds in the US to fund their own payouts last year, increasing risk to the businesses, according to an analysis by Moody’s Ratings.

The transactions, called dividend recapitalizations, have gained popularity among private equity firms who are looking for ways to cash in on their investments. Exits have become more difficult because economic uncertainty has slowed acquisition activity and the market for initial public offerings, Moody’s said.

Meanwhile, the credit market has stayed open to borrowers, including companies that are already leveraged. That’s allowed private equity firms to ...