Ares Leads $3.3 Billion Private Loan for UK Insurance Broker Ardonagh at Low Rate *Centurion Insurance AFS*

Ares Management Corp. is leading a $3.3 billion private credit loan for UK insurance broker Ardonagh Group Ltd., with the debt’s pricing among the lowest seen in direct lending, people with knowledge of the matter said.

Ardonagh’s loan is set to price at 475 basis points over a US reference rate, the people said, asking not to be identified. That would make it among the cheapest private credit deals on record, according to data compiled by Bloomberg. Goldman Sachs Group Inc.’s asset management division is also a significant lender, the people said.

It shows direct-lending funds are pushing down their prices in a bid to stay competitive, as traditional underwriter banks elbow their way back into the market for big deals. That’s been reflected in the case of Ardonagh, where Wall Street lenders led by Morgan Stanley and Goldman Sachs swooped in to manage a roughly $2.3 billion bond sale for the firm.

UK Insurance Broker Ardonagh Weighs Refinancing $3.9 Billion Debt Pile

The UK insurance broker had originally contemplated private lending of as much as $5 billion to refinance debt, reorganize its balance sheet and fund acquisitions. The new financing will be provided in a mix of currencies including US dollars and euros, the people said.

Other direct lenders on the loan, which is expected to have an original issue discount of 98.5 cents on the dollar, include Antares Capital, KKR & Co., Oaktree Capital Management, Caisse de Dépôt et Placement du Québec, Guggenheim and HPS Investment Partners.

Representatives for Ares, GSAM, Oaktree, CDPQ, KKR and Antares declined to comment. Ardonagh, HPS and Guggenheim did not immediately respond to requests for comment.

The deal marks the end of the tussle in the past month between banks and private lenders to refinance Ardonagh, which counts Madison Dearborn Partners and HPS as major shareholders. MDP also declined to comment. While private credit has burgeoned in recent years to become a $1.7 trillion business, banks are regaining share as public debt markets now look healthier.

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