(Jan 20): Healthcare companies are increasingly tapping private credit firms for their financing needs, marking a win for direct lenders against their Wall Street peers, according to Moody’s Ratings.
Private credit has snagged about US$21 billion of debt tied to health care companies over the past four years, refinancing it away from the broadly syndicated market, Moody’s said in a report Tuesday (Jan 20). About US$10 billion of that volume was added in 2025, the ratings firm said.
As high interest rates and a lack of mergers and acquisitions have suppressed financing opportunities, banks and private credit firms have been in increasingly tense competition to snag deals.
Direct lenders refinanced US$37 billion of debt away from the public markets last year, according to Moody’s, which cited data from PitchBook. About US$34 billion was snagged by broadly syndicated lenders from the private credit market.
In the past, direct lenders have typically financed health care companies in financial distress or ones that desperately need liquidity, according to Moody’s. But as the US$1.7 trillion private credit market has matured, more companies are turning to direct lenders to help them grow.
In 2025, most of the healthcare businesses that chose to refinance their public debt in the private markets did so “to finance growth rather than seeking the more traditional lifeline when options had narrowed in the public space,” according to the report.
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