News and Analysis
Bankers look to offload BetaNXT’s hung LBO debt
- Sasha Padbidri
- +Emily Fasold
- + 1 more
•2 min read
Bankers are in the process of offloading chunks of a $750m loan that financed wealth management platform BetaNXT’s buyout by Clearlake Capital and Motive Partners, sources told 9fin.
BetaNXT’s acquisition closed in July 2022 and syndication, led by Goldman Sachs, is understood to have been in process since late last year. Financing for the deal was provided by Goldman Sachs, Wells Fargo, UBS, BNP Paribas and ING Capital.
While price talk was not disclosed, the loan was at one point offered with an original issue discount in the high-80s, said a source. Lenders that have placed orders include a mix of direct lenders and BSL accounts.
The company’s buyout was announced at a time when uncertainty stemming from the Russia-Ukraine war and the rising interest rate environment made lenders increasingly choosy with financing deals. Given the cooling appetite for deals, several investment banks got stuck with debt from jumbo LBO financings.
9fin clients can see that conditions in the leveraged loan market have since improved and some banks have seized the opportunity to offload hung debt. Goldman Sachs, which is also one of the lead banks for software maker Citrix’s LBO financing, is looking to sell $3.95bn of junior debt.
But lenders are still selective with deploying cash.
One buysider passed on BetaNXT due to its narrow customer mix: “One client accounts for nearly half of its revenue,” the buysider said. “They have a really good CEO with an impressive track record, so we wanted to believe in this company but just couldn’t because of the customer concentration.”
BetaNXT announced last week that it acquired Mediant Communications, a technology platform for investor communications.
Spokespeople for Goldman Sachs, Clearlake and BetaNXT declined to comment. Motive did not return a request for comment.
