Baker Tilly calls off $3B debt deal

Baker Tilly has dropped plans for a roughly $3 billion leveraged loan that was intended to refinance private credit debt and fund a dividend, according to people familiar with the matter. 

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The accounting services firm, owned by Hellman & Friedman and Valeas Capital Partners, held meetings with investors last month. However, some buyers indicated they needed wider spreads to purchase the debt than were being offered, one of the people said, asking not to be identified discussing private information. 

“Baker Tilly evaluated an opportunistic refinancing but decided not to proceed after considering a variety of market and economic factors,” a spokesperson for the company said in an emailed statement. The firm may try again when “when conditions are more favorable,” the spokesperson said. 

Representatives for Hellman & Friedman and Valeas Capital declined to comment. A representative for Deutsche Bank AG, appointed to arrange the transaction, didn’t immediately respond to a request for comment.

Baker Tilly, which has previously used debt to fund acquisitions, sought to lower its borrowing costs at a time when interest rates are expected to stay higher for longer and a raft of junk-rated companies stare down looming debt maturities.

Some borrowers, particularly in the beleaguered technology and software sectors, have had to pay a higher price and acquiesce to investor-friendly terms to refinance their loans in recent weeks.

Beyond refinancing its existing debt from direct lenders, Baker Tilly aimed to extract a dividend payment that could have swelled to as much as $1 billion, Bloomberg News previously reported. It would have been the largest dividend transaction in the non-investment grade markets this year.

The proposed package would have also been its first such attempt in the U.S. leveraged loan market since Hellman & Friedman and Valeas agreed to buy the business in February 2024.