Private Equity Racks Up $94 Billion Debt in 2025 to Fund Payouts

Private equity-owned companies borrowed $94 billion in US leveraged loans and high-yield bonds last year to fund payouts, according to Moody's Ratings. That deal-driven leverage increases business risk by loading debt onto operating companies and could pressure leveraged loan/high-yield spreads and lender underwriting, raising downside for PE-backed firms and credit investors.

Analysis

Private equity-owned companies borrowed $94 billion in US leveraged loans and high-yield bonds last year to fund payouts, according to Moody's Ratings. That deal-driven leverage increases business risk by loading debt onto operating companies and could pressure leveraged loan/high-yield spreads and lender underwriting, raising downside for PE-backed firms and credit investors.