Goldman Sachs Group Inc. deal maker Vivek Bantwal said that companies are striking a balance between using private credit and publicly distributed debt, adding that which one is used shifts back and forth depending on borrowers’ needs.
(Bloomberg) — Goldman Sachs Group Inc. deal maker Vivek Bantwal said that companies are striking a balance between using private credit and publicly distributed debt, adding that which one is used shifts back and forth depending on borrowers’ needs.
“I think we’ll see that pendulum shift back and forth,” Bantwal, co-head of the global financing group at Goldman, said during an interview at the Bloomberg Sell-Side Forum Thursday in New York. “But I think there’s a use case for each market. I think they’re both important.”
Companies could have a loan that would be distributed, accompanied by a second-lien or preferred security that’s done in private markets. “I think these markets will continue to feed off each other,” he said.
Borrowers are also tapping the public markets to refinance private debt.
Private credit deal makers have been burned twice this month after Blackstone Inc. turned to public markets to seek a better deal on its buyout of an Emerson Electric Co. unit. Talks also collapsed between The Carlyle Group Inc. and Veritas Capital for a stake in health-care analytics company Cotiviti.
Syndicated deals have the benefit of a wider range of investors, but there are situations where private credit can “make a lot of sense” during a choppy market, seeking more leverage or borrowers seeking more customization, he said.
Read More: Private Credit Finds Deals Can Slip Away Fast as Markets Reopen
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