“AMC Capital, a Hong Kong-based financial adviser representing EdgePoint, has approached private credit funds and banks to gauge their interest in the loan,” the people said, who asked not to be identified discussing private matters.

“The facility for EdgePoint, a portfolio company of US-based global infrastructure firm DigitalBridge Group Inc has a five-year tenor and could pay a margin of 400 basis points over the benchmark Secured Overnight Financing Rate,” the people said.

“Negotiations are ongoing and the deal’s terms could change,” they added.

EdgePoint declined to comment, while AMC Capital didn’t respond to a request for comment.

EdgePoint’s financing is the latest in a series of transactions globally, where borrowers, such as private equity firms, are raising loans to fund dividend recapitalisations as they remain under pressure to return money to their stakeholders.

A dividend recapitalisation, where sponsors pile debt into a portfolio company in order to fund a payout, is a typical private equity strategy used to meet return targets when a conventional exit via a sale or an initial public offering proves impossible or unattractive.

Earlier this year, DigitalBridge had sought to sell EdgePoint for as much as US$4 billion, but talks stalled amid valuation concerns.

The potential sale drew interest from investment firms including I Squared Capital, Bloomberg News reported.

EdgePoint, backed by sovereign wealth fund Abu Dhabi Investment Authority and International Finance Corporation, has presence in Malaysia, Indonesia and the Philippines, according to its website.