KKR Signs A$200 Million Private Credit Loan for Australia’s MYOB

(Bloomberg) -- KKR & Co. signed a deal with private credit lenders for about a A$200 million ($133 million) loan for MYOB Ltd., an Australian accounting software firm that the private equity giant acquired in 2019, people familiar with the matter said.

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The new loan will have a payment-in-kind element to capitalize interest, according to the people, who asked not to be identified as the matter is private. A PIK loan is where the borrower is allowed to add the interest cost to the principal amount.

The loan will have a margin of 525 basis points over the Australian benchmark rate, and may rise to 575 points in the event MYOB elects to exercise the PIK option, one of the people said.

The deal would be part of the $1.7 trillion global private credit market, which is fast becoming a serious rival to mainstream lending by offering higher, floating rates of return. The asset class has been growing even in the face of potential headwinds from elevated interest rates.

The new loan will be used to repay a A$145 million junior debt tranche and finance a deferred payment called an “earnout arrangement” for MYOB’s acquisition of human resources fintech Flare in 2022, Bloomberg reported earlier.

KKR declined to comment when contacted by Bloomberg News.

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