(Bloomberg) -- Blackstone Inc. has provided a more than $1 billion private credit loan package for BeyondTrust, a cybersecurity company, according to people with knowledge of the transaction.  

The financing includes an $880 million loan, which priced at among the tightest levels for a US company this year, according to market participants. Direct lenders have hundreds of billions of dollars to deploy at a time when yields have broadly started dropping across debt markets, which could push yields even lower. 

The main unitranche loan that Blackstone provided pays 5 percentage points over the Secured Overnight Financing Rate and was sold at 99 cents on the dollar, the people said. The company is the latest to use direct loans to refinance more widely held debt. 

Blackstone weighed the pricing on the loan against the company’s leverage in the high six times when calculated against earnings before interest, taxes, amortization and depreciation minus capital expenditures, a loan to company value ratio in the mid 30% range, and documentation that protects it from earnings add-backs and asset stripping, according to a person with knowledge of the firm’s thinking.

Representatives for Blackstone and BeyondTrust declined to comment. A spokesperson for Francisco Partners didn’t respond to requests for comment.

The deal wrapped up in late November. BeyondTrust’s financing package also includes a loan that the company draws down in the future, known as delayed-draw debt, and a revolving credit facility, the people said. The transaction refinances all of BeyondTrust’s existing debt, namely a roughly $640 million first-lien term loan and a $242 million second lien loan.  

Previously known as Bomgar, BeyondTrust focuses on Internet security and remote access software. It’s owned by leveraged buyout firm Francisco Partners, which bought it from Thoma Bravo in a deal announced in 2018. 

A series of companies have recently opted to use private credit to refinance more widely held debt, including syndicated leveraged loans. Private loans can be easier to customize, and can close faster. Electro Rent Corp., a provider of electronic equipment, is working with a group of direct lenders to refinance debt, while Consolidated Precision Products Corp. recently opted to get a direct loan instead of a syndicated loan.  

Read more: Platinum’s Electro Rent Talks to Direct Lenders for Refinancing

BeyondTrust boosted its debt load over time to help fund a string of acquisitions. The prior first lien loan, set to mature in 2025, was originally sold at 4 percentage points over the London interbank offered rate. 

--With assistance from Sri Taylor and Ellen Schneider.

©2023 Bloomberg L.P.