(Bloomberg) -- Platinum Equity-owned electronic equipment rental provider Electro Rent Corp. is working with a group of direct lenders to refinance debt, according to people with knowledge of the matter.

Oaktree Capital Management is leading the financing package, which may take out more than $500 million of Electro Rent’s first lien term loan due 2024 and its $161 million second lien loan due 2025, said the people who declined to be identified as the details are private. The financing could include a roughly $700 million first lien term loan, which will also have a paid-in-kind component, as well as a fresh revolving credit facility, one of the people said.

Houlihan Lokey Inc. is working with the company on the transaction, a person familiar added. The financing has yet to be finalized and details could change, they said.

Representatives for Platinum and Electro Rent did not respond to a request for comment, while spokespeople for Oaktree and Houlihan declined to comment.

The deal will be the latest in a string of transactions where direct lenders have taken out large loans from the broadly syndicated market. That comes at a time when the largest buyers of the debt — collateralized loan obligations — have been unable or unwilling to extend some deals as half are out of their reinvestment periods. This year companies such as PetVet Care Centers, Hyland Software Inc., Finastra Group Holdings Ltd. and Tecomet have been taking a similar route, looking at refinancing upcoming maturities with direct lenders.

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Platinum purchased Electro Rent in 2016, taking the company private. In May, S&P Global Ratings placed the firm on credit watch negative given the near-term maturities on its hefty debt load. “Although we continue to view the company’s operating performance as relatively stable, we note that higher interest rates have reduced ERC’s free operating cash flow generating ability, and the company has drawn on its revolver in recent quarters,” the ratings company said in a note.

Electro Rent’s debt includes an $85 million revolving credit facility, as well as the existing term loans which trade just below par, according to data compiled by Bloomberg. The company provides equipment services, including rentals and leases for the testing and measurement equipment market, S&P noted.

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