PEP Firms Sweeten Loan Terms as Volatility Hits Riskier Debt

Underwriters of two proposed loans to Australia-based Pacific Equity Partners’ companies have sweetened the terms, people familiar with the matter said, signaling investor demand for greater returns in a volatile market.

The interest margins on the financing — education resources supplier Modern Star Holdings Bidco Pty.’s A$565 million ($409 million) loan and hospital operator Healthe Care Australia Pty.’s A$310 million facility — have been lifted by 25 to 50 basis points, the people said, who asked not to be identified discussing private matters.