(Bloomberg) -- A group of Wall Street lenders led by Morgan Stanley and Goldman Sachs Group Inc. swooped in to manage a roughly $2 billion bond sale for Ardonagh Group Ltd., a key win for banks over private credit firms that had offered a record-breaking loan to the UK insurance broker.
The offering, announced on Monday, includes a mix of secured and unsecured bonds denominated in US dollars and euros, and confirms an earlier report by Bloomberg News. Private credit firms will still provide a loan package of over $3 billion, according to people with knowledge of the matter, who asked not to be identified discussing confidential information.
Ardonagh, which counts Madison Dearborn Partners and HPS Investment Partners as major shareholders, had originally contemplated a private loan of as much as $5 billion to refinance debt, reorganize its balance sheet and fund acquisitions, Bloomberg News previously reported. That deal would have ranked as the largest direct-lending deal on record, according to data compiled by Bloomberg.
The bond sale for Ardonagh is the latest in a series of wins for banks over the $1.7 trillion private credit market, as the prospect of interest rate cuts has given high-yield bonds and broadly syndicated leveraged loans a boost, making those markets more attractive to borrowers. Ardonagh is well-known in the rapidly-expanding private credit market, having secured what was then the biggest-ever loan from a group of private credit funds in 2020.
The three-part bond sale will be discussed during roadshow calls and meetings in New York, with pricing expected this week. Representatives for Ardonagh and HPS didn't immediately respond to requests for comment made outside of regular business hours, while those for Madison Dearborn, Morgan Stanley and Goldman Sachs declined to comment.
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--With assistance from Colin Keatinge and Paul Cohen.
(Adds details of the bond offering throughout.)
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