(Bloomberg) -- Carlyle Group Inc. is asking both Wall Street banks and private credit lenders to arrange debt packages of at least $2.5 billion to support its potential acquisition of stakes in some of medical-device maker Medtronic Plc’s business units, according to people with knowledge of the matter.
The discussions are early, which means details of any debt packages could change, the people said, asking not to be named discussing a private transaction. Reuters first reported that Carlyle is in talks to acquire majority stakes in two of Medtronic’s units in a deal valued at more than $7 billion.
Representatives for Carlyle and Medtronic declined to comment.
Private equity firms typically “dual-track” debt deals to support their leveraged buyouts, which leaves banks and direct lenders to compete against each other to win business. Investment banks and private credit firms are also vying to provide as much as €4 billion ($4.2 billion) of debt to finance a potential take-private of European classifieds company Adevinta ASA.
Banks had been stuck with debt on their balance sheets as the Federal Reserve quickly raised interest rates, hampering their ability to underwrite new deals. But the junk bond and leveraged loan markets have been recovering, which let banks offload some of these so-called hung deals, and also successfully underwrite and sell new commitments in recent months.
Read More: Price Transparency on Junk Debt Deals Smoothes the Way for More
--With assistance from Davide Scigliuzzo.
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