Private Credit’s Secret Weapon for Deals Is Buying Up Bank Loans

Typically, private credit firms go up against banks to pitch companies on a debt package and one winner emerges. But with competition fierce, direct lenders have created a new tactic to snag deals.

The play: A private credit firm — one with arms that invest across various debt markets — buys a small slice of a company’s syndicated loans. Once in, they have greater access to the borrower, and can pitch the company to shed its bank debt and opt for a private solution.

Blackstone Inc. recently provided a $2 billion private credit facility to Mitratech, which was used ...