Blue Owl Leads Around $4 Billion Debt Deal for PCI Pharma

Blue Owl Leads Around $4 Billion Debt Deal for PCI Pharma

(Bloomberg) — Blue Owl Capital Inc. is leading a private credit transaction of roughly $4 billion for PCI Pharma Services, according to people with knowledge of the matter, in what would be one of the largest direct lending deals of the year.

Most Read from Bloomberg

The transaction includes an approximately $3 billion unitranche loan that would refinance the company’s existing debt, the people said, asking not to be named discussing a private transaction. In addition, lenders are in discussions to provide a delayed-draw term loan of more than $1 billion, though the size could still change, they said.

The company currently has a $1.9 billion leveraged loan and around $700 million of preferred equity, plus other liabilities, the people added.

Pricing is being discussed at around 4.75 percentage points over the Secured Overnight Financing Rate, they said.

Discussions are ongoing for the transaction and details could change, the people added.

PCI Pharma provides pharmaceutical services such as commercial and clinical packaging. Kohlberg & Company acquired a majority stake in the firm while Mubadala Investment Company bought a minority stake in a 2020 transaction, which left the former owner Partners Group with a minority investment, according to a news release at the time.

Representatives for PCI, Blue Owl and Kohlberg declined to comment. Representatives for Mubadala and Partners Group did not immediately respond to requests for comment.

Debt markets are heating back up and this would represent one of the biggest transactions in the private credit space of 2025. It would also mark a win for direct lenders that vie to take debt from the leveraged loan market, while the delayed-draw portion would add fresh supply.

Private credit and leveraged loan providers have been frustrated by a high number of repricings over the last year that locked in lower borrowing costs without adding any new debt to the markets.

PCI Pharma last tapped the leveraged loan market in May when it sold roughly $1.9 billion worth of debt for a repricing and add-on transaction at 3.25 percentage points over the SOFR benchmark.

The company is rated B3 by Moody’s Ratings and B- by S&P Global Ratings, the lowest rung of junk.

Unitranche facilities blend senior and junior debt. Delayed-draw loans allow a company to raise additional debt at a later date.

Most Read from Bloomberg Businessweek

Leave a Reply

Your email address will not be published. Required fields are marked *