(Bloomberg) -- Blackstone Inc. is in talks with private credit lenders to raise as much as $2.8 billion in financing for its audio-visual and event-services company Encore Group USA LLC to address its upcoming maturities, according to people with knowledge of the matter.

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The package may include a $2.3 billion unitranche, a mix of junior and senior debt typically provided by direct lenders, said the people, who asked not to be identified as the details are private. The lenders have been discussing pricing the facility at 5 percentage points over the Secured Overnight Financing Rate, with a discounted price of 98 cents on the dollar, they added.

The unitranche will come in addition to a $500 million preferred equity raise that Blackstone has been working on, Bloomberg previously reported.

The loan is expected to have a portable structure, which means the debt would remain in place if the business is sold, they said. They added it may also have a covenant-lite structure. Cov-lite and portable deals have become more common as lenders try to deploy cash and offer borrower-friendly features.

The refinancing comes as the broader credit markets continue to rally and private credit firms try to deploy the record amount of dry powder they’ve raised. To win deals, managers in the $1.7 trillion industry have been offering cheaper pricing and giving up key investor protections. They’re also keeping larger slices of financings for themselves, and even swooping in at the last minute to snatch business from the leveraged loan market.

Conversations are preliminary and details of the financing may change. A Blackstone representative declined to comment, while an Encore representative did not immediately reply to requests for comment.

The new financing would be use to repay Encore’s existing debt, the people said. The company has maturities in 2025 and 2026, according to data compiled by Bloomberg. Management of the company said during an investor call earlier this year that Encore had been in discussions with numerous financial institutions about selling minority stakes in the business.

Encore ran into a liquidity shortfall in the wake of the pandemic, but results have been rebounding since. Both revenue and earnings before interest, taxes, depreciation and amortization grew in 2023, with the company projecting further growth this year, Bloomberg reported. Highlighting investors’ optimism, the company’s $1.18 billion term loan is quoted at around 99.7 cents on the dollar, versus a low of 61 cents in 2020, Bloomberg-compiled data show.

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