However, that pricing is a non-starter for several prospective lenders, according to multiple sources close to the situation; elsewhere in the market, unitranche loans are generally offering pricing in excess of 600bps, they noted. 

The below-market pricing on Galway’s proposed add-on loan would enable the company to avoid triggering MFN protection for existing lenders, the sources added. “This is a big MFN management exercise,” said one. 

Galway, which is backed by Harvest Partners, is an insurance brokerage distribution platform. 

Back in 2021, the company raised a $3.4bn private credit facility led by Antares Capital; that deal, which included a revolver and delayed draw term loan, was then one of the largest private credit deals ever, according to S&P. 

As of last December, that facility carried a coupon of Libor+525bps, according SEC filings from various business development companies, including vehicles managed by Ares and KKR. The loan has a 2028 maturity. 

Because of MFN protection on that credit facility, existing lenders are entitled to compensation if pricing on any incremental debt exceeds a certain level. As such, Harvest and Galway are especially incentivized to keep pricing on the add-on tranche below that level, sources noted. 

This is not the first time that Harvest has triggered a lender outcry around MFN protection.

Last year, Integrity Marketing — another Harvest portfolio company — sparked pushback from private credit lenderswhen it sought to structure an add-on loan with a springing maturity, in order to skew the MFN calculation in its favor. Integrity ultimately tweaked the terms of the deal. 

In our reporting on that situation, we noted that Galway was also in the market with a proposed bond deal, as a way to raise new debt without triggering MFN provisions.

Antares declined to comment. Harvest and Galway did not respond to requests for comment.