PE Firms Flood Junk Debt Market to Pay Themselves

Private equity firms, struggling to find buyers for their investments, are turning to an old playbook like never before.

Financial sponsors are extracting cash from their portfolio companies by raising debt to fund payouts to themselves and their investors at an unprecedented clip. Such dividend loans have hit $28.7 billion so far this year, putting them on track to surpass 2021’s record $28.8 billion, according to data compiled by Bloomberg.