Private lenders seize riskier loan slice while banks accept a slimmer role
Canada’s PSP Investments is helping anchor one of the year’s largest buyout financings as private credit steps deeper into riskier corporate debt.
According to Reuters, PSP Investments joined Oaktree Capital Management, Franklin Templeton and other private lenders in buying about US$2bn of subordinated, second-lien debt that banks had originally committed to provide for Blackstone Inc. and TPG Inc.’s acquisition of Hologic Inc.
The second-lien loan is part of a wider US$12.25bn financing package and will pay 5 percentage points over a floating-rate benchmark at 99 cents on the dollar.
Reuters said the buyer group also includes Palmer Square Capital Management, Oak Hill Advisors, Sona Asset Management, Lord Abbett and Blackstone’s own credit unit.
Citigroup Inc., Barclays Plc, RBC Capital Markets and Bank of America Corp. underwrote both the US$2bn second-lien and roughly US$9.5bn of first-lien loans in dollars and euros, which could be sold to investors as soon as January.
Because Blackstone and TPG lined up the second-lien buyers themselves, banks will earn only marginal fees on that slice.
Blackstone and TPG agreed last month to acquire Hologic for as much as US$18.3bn, with the Abu Dhabi Investment Authority and Singaporean sovereign wealth fund GIC Pte also taking minority stakes, Reuters said.
Hologic makes medical tests and medical-technology products focused on women’s health.
On fundamentals, Hologic is still growing, though not rapidly.
According to Yahoo Finance, the company reported adjusted earnings per share of US$1.13 in the fourth quarter of fiscal 2025, up 11.9 percent year over year and ahead of the Zacks Consensus Estimate, while GAAP earnings per share rose 9.2 percent to US$0.83.
Full-year fiscal 2025 adjusted earnings per share increased 4.4 percent to US$4.26, and revenue for the year edged up 1.7 percent to US$4.10bn, with fourth-quarter revenue up 6.2 percent to US$1.05bn.
Yahoo Finance reported that Hologic’s adjusted operating margin improved to 31.2 percent despite a modest decline in adjusted gross margin to 60.9 percent driven by product mix and tariffs.
The company ended the quarter with US$1.96bn in cash and cash equivalents and US$2.51bn in total long-term debt including the current portion, slightly lower than a year earlier.
