Ares Management (NYSE:ARES) is arranging a $2.2 billion direct loan to help fund a healthcare services acquisition, marking it one of the largest private credit deals this year.
The loan will finance pharmacy benefits manager MedImpact Holdings Inc.’s acquisition of Medical Card System Inc, according to Bloomberg. Discussions are still underway and could change.
The financing is expected to price at a spread of at least eight percentage points above the benchmark rate. The debt will be issued on a second-lien basis, placing the new lenders behind existing senior creditors in the repayment hierarchy.
Medical Card System, a Puerto Rico-based healthcare services organization, was bought by middle market investment firm Kinderhook Industries in 2022 to invest in health plans, health maintenance organizations and healthcare services organizations, according to a press release at the time. Financial terms of the deal remain undisclosed.
MedImpact is a privately held pharmacy benefit manager founded in 1989 in San Diego, California. The company remains majority-owned by its founder, chairman and CEO Frederick Howe.
Private credit funds have faced a tough market environment this year amid concerns over weak underwriting and exposure to AI-vulnerable software companies.
Buyout Firms Have Trouble Monetizing Investments
In the current higher-rate environment, private equity deal-making is slow while the deployment and turnover of capital in the market remains limited.
KKR’s latest investment outlook revealed that 2025 was the second-best year on record for private equity exits by dollar value. Yet despite the rebound, roughly 32,000 portfolio companies worth nearly $4 trillion remain unsold globally.
Average holding periods have stretched to nearly seven years, up from the historical norm of five to six years, as sponsors wait for stronger market conditions and improved valuations before selling assets.
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