Bye, bye to large borrowers, hello to a pile of fresh cash.

That has been a conundrum facing direct lenders after some of the largest borrowers in private credit left the market in the first half of the year, resulting in big repayments. That adds to substantial amounts of uninvested capital in a tepid M&A environment, leaving lenders scrambling to put the money to work.

This month, IG insurance brokerage Brown & Brown made an approximately $10bn acquisition of Risk Strategies parent Accession Risk Management, which had $4.57bn of outstanding debt held privately.

In addition, Trucordia refinanced $3.12bn of direct loans into the broadly institutional market, while Beacon Mobility paid down a $1.45bn private credit facility in part via a $1.28bn institutional loan-and-bond issuance.

KnowBe4 is also anticipated to turn to the syndicated market to refinance its debt obligations, an initially $1bn recurring revenue facility. That deal financed KnowBe4’s acquisition by a Vista Equity Partners-led investor consortium. The proposed BSL deal would comprise a $1.2bn first-lien term loan and a $260mn second-lien term loan, led by JP Morgan and KKR, respectively, according to sources.

Lenders have said that these large pay downs are forcing them to think about how to best position their existing portfolios in the anticipation that the influx of capital will keep spreads lower. “Where the larger repayments impact us and probably the broader market is just thinking about defending the portfolio,” one large lender said. Relationships and proactiveness are important to retain issuers and can include proposing a repricing or offering portability, given the elongated hold times, they said.