Legal software provider Relativity ODA LLC has been able to cut its borrowing costs on its existing private debt by turning to the leveraged loan market, according to a media report on Thursday.
JPMorgan Chase (JPM) is leading a group of banks in refinancing the $720M first-lien term loan, allowing Relativity to reduce its interest rate to 2.75 percentage points over the benchmark, Bloomberg News reported, citing a person familiar with the matter.
More borrowers that took on private loans are refinancing them in the leveraged loan markets as they’re able to secure lower rates, while investors seek the yield. Goldman Sachs (GS) last month helped finance over $2B of private debt for Pye-Barker Fire & Safety LLC.
In the Relativity debt deal, the company improved the pricing to $0.9975 on the dollar vs. the original offer of $0.995, the person told Bloomberg. That’s expected to save the borrower at least $12.3M per year, Bloomberg estimated.
The original financing was provided by a group of lenders, including Blackstone Private Credit Fund (BX), Apollo Debt Solutions BDC, Blue Owl Credit Income Corp., and Ares Capital.