Private equity firms target Australia with new funding tool

Sydney

PRIVATE equity firms doing buyouts in Australia are turning to a kind of financing used in the US and Europe that gives them more flexible terms, even as it may introduce new risks for creditors.

There have been at least four deals Down Under this year where private equity firms including KKR & Co have used so-called unitranche loans, which fuse senior and subordinated parts of traditional leveraged transactions, to finance acquisitions.