JPMORGAN Chase & Co’s leveraged finance desk and Goldman Sachs Group’s private credit team are among the firms in discussions to lead a US$1.05 billion financing for metal and hardware producer ASC Engineered Solutions, according to a source familiar with the matter.

Apollo Global Management and Oaktree Capital Management are also in the mix, said the source, who asked not to be identified discussing a private matter. The fresh cash would be used to refinance the syndicated debt the company took on in 2019 that JPMorgan arranged, according to sources familiar with the matter.

The bank is offering around 4.25 percentage points over the Secured Overnight Financing Rate, while direct lenders have discussed lending at a level closer to 5 percentage points, the source added. That’s at the lower end of where recent private credit deals have priced, which range between 5 percentage points to 5.5 percentage points over the benchmark, according to data compiled by Bloomberg News.

Representatives from JPMorgan, Goldman Sachs, Apollo and Oaktree declined to comment. A representative from ASC did not respond to requests for comment.

Competition for new financings has intensified in recent months, with pricing reaching record lows in some recent direct lending deals as private funds race for opportunities to deploy their dry powder. As the incumbent, JPMorgan is offering lower pricing than direct lenders in a move that highlights traditional lenders’ pushback against private lenders’ encroachment on their turf.

The company’s current backer, Tailwind Capital, has tapped Evercore to assist on the financing, according to other sources familiar with the transaction. Evercore is also sounding out third-party investors for about US$330 million in the form of credit or structured minority equity to support a potential near-term acquisition, the source added. Conversations are ongoing and details of the financing may change, they added.

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Evercore and Tailwind representatives declined to comment.

ASC has a US$740 million first lien term loan due 2026 and a US$100 million second lien term loan which together carry a weighted average interest cost of around 5.5 percentage points over the benchmark rate, according to data compiled by Bloomberg. The company also has a US$250 million revolving credit line.

Buyout firm Tailwind Capital used proceeds from the 2019 loans to purchase Anvil International, which merged with Smith Cooper International to create ASC.

Oak Brook, Illinois-based ASC supplies pipe joining systems, fire protection and fabrication products. In February it acquired Ward Manufacturing, a manufacturer of piping components. BLOOMBERG