Tyler Craig, Managing Director, Debt Capital Markets and Business Development
Since joining OMERS Private Equity last year, Tyler Craig has been focusing on our debt financing activities for new and existing investments, as well as managing the firm’s financing relationships. Our primary goal is optimizing capital structure – making terms as cheap and flexible as possible – across our portfolio.
The first half of 2022 has been marked by many challenges but also many opportunities in the debt capital markets. The Q1 environment was particularly volatile, with Russia’s invasion of Ukraine as well as inflation affecting debt markets. The volatility has continued in Q2 with fears of a recession rippling through the markets. As a result, financing markets have repriced themselves, making it harder to do more opportunistic deals. However, even in the face of a challenging market backdrop, OMERS Private Equity successfully raised over C$2.25bn of debt capital (US$1.8bn). I wanted to share a few highlights from Q2 2022:
For Epiq, a provider of outsourced business and litigation support services to law firms and corporate customers, we raised US$1,335M in capital to refinance our existing credit facility and extend maturities. We also obtained a successful rating agency upgrade to achieve an optimal pricing outcome.
For Paradigm, a provider of complex and catastrophic case management for the workers’ compensation industry, we raised US$185M of new capital to repay Revolver borrowings and to fund a dividend to shareholders. We also amended and extended our existing Revolver. Most importantly, momentum during syndication allowed for a rare “reverse flex,” which allowed for the upsizing of the debt quantum, while decreasing pricing.
At Premise Health, one of the largest direct-access care networks in the United States, we raised US$191M of new capital to fund a dividend to shareholders. By achieving an OID of 98.0 on May 27, it validated the strength of Premise’s credit. It also had support from our key relationship lenders to drive best-in-class terms.
And, most recently, we made a Convertible Preferred Investment into Precisely, the global leader in data integrity.
In addition to our partnership-driven approach and buy-and-build strategy, our dedicated debt capital markets function provides long-term support for our portfolio companies. As we head into the second half of 2022, we will continue working to optimize capital structures across our portfolio, regardless of how conditions continue to evolve.