Lloyds Bank has forged a partnership with investment manager Oaktree Capital Management to support middle-market sponsor-backed borrowers in the UK via a new direct lending facility.
As part of this, Lloyds Bank’s structured debt finance team will collaborate with Oaktree Capital Management’s European private debt platform.
Together, they will offer a senior debt solution to the bank’s private equity clients for new buyouts and refinancings, including term debt, acquisition and working capital facilities, along with agency and full ancillary product services.
The partnership, which includes a multi-year commitment, will have a combined single name hold capacity of £175m per transaction.
Lloyds Bank and Oaktree Capital Management aim to originate loans for UK middle-market sponsor-backed firms with EBITDA of £10-75m.
Leveraging Lloyds Bank’s over 20-year track record of supporting sponsor-backed UK middle-market transactions, the partnership aims to provide relationship banking with a faster, more tailored service.
The partnership intends to simplify the funding process by eliminating the need for multiple funding parties. This approach will reduce complexity for clients and provide easy access to follow-on capital and Lloyds Bank’s full range of banking services.
Lloyds Bank managing director and sponsors and structured finance head James Ranger said: “We have a proven track record of financing sponsor clients’ transactions in the Mid-Market, and by partnering with Oaktree, we can provide a market-leading one-stop solution.
“As a result, sponsor clients will be able to finance larger transactions without needing to bring on board additional lenders, which will make deals easier to conclude and reduce uncertainty for all concerned.
“Oaktree’s deep expertise in this space makes them an ideal partner for us, and we look forward to further supporting our sponsor clients’ growth ambitions.”
Oaktree Capital Management’s European private debt platform, part of the firm’s performing credit group, is said to have deployed over $3.9bn in private credit over two decades.
Lloyds Bank’s clients are expected to benefit from the investment manager’s history of developing bespoke, efficient financing solutions across various sectors.
This will provide quicker decisions and commitments compared to traditional bank lending, along with greater certainty of execution.
Oaktree Capital Management European private debt strategy managing director and portfolio manager Nael Khatoun said: “Providing financing solutions to sponsor-backed companies in the UK remains a significant long-term opportunity.
“We believe Oaktree’s Partnership with Lloyds Bank will be a compelling proposition to meet this demand, providing borrowers with certainty of execution and an expedited transaction process.
“Lloyds Bank has long established itself as a market leader in the UK, and we look forward to working with them to provide sponsor clients with a comprehensive one-stop senior debt solution for their capital needs.”
PwC, Lloyds Bank Corporate Markets, and Linklaters advised Lloyds Bank, while White & Case and EY advised Oaktree Capital Management.
