Strategic View: The Very Group, a UK online retailer controlled by the Barclay family, refinanced its £575 million high-yield bond with a £600 million private credit transaction in Q1 2025. The deal, led by Mayfair-based fund Arini, exemplifies private credit displacing public bond markets for distressed-adjacent borrowers, albeit at significantly higher pricing reflecting increased risk .
Full story: This transaction illustrates private credit’s role as refinancing lifeline for challenged borrowers unable to access traditional capital markets. Very Group—operating very.co.uk, an online retailer serving 4.5 million UK customers with home, fashion, and electronics—faced a looming £575 million high-yield bond maturity amid operational challenges and ownership complexity tied to the Barclay family’s broader financial restructuring. With public bond markets closed to a borrower perceived as distressed-adjacent, the company turned to private credit for rescue financing .
Arini Capital, a London-based opportunistic credit fund, led the £600 million private credit facility—refinancing the maturing bond while providing modest additional liquidity to address working capital needs. The pricing reflects elevated risk: sources suggest the facility carries spreads dramatically wider than the original high-yield bond, potentially 800-1,000 basis points over SONIA, with aggressive covenant packages and likely equity participation rights for lenders. This “distressed pricing” compensates lenders for assuming meaningful default risk while providing Very Group with runway to execute a turnaround .
The club structure likely involved 5-8 opportunistic credit funds comfortable with elevated risk-return profiles. Beyond Arini’s lead position, participants probably included distressed debt specialists, family offices seeking high-yield alternatives, and potentially existing bondholders converting positions into the new credit facility. The lender group faces material uncertainty: Very Group’s ownership structure involves the Barclay family, Abu Dhabi investment vehicle IMI (which funded part of the family’s debt tied to Telegraph newspaper ownership), and now Carlyle Group asserting change-of-control rights .
Indeed, subsequent developments highlight the transaction’s distressed nature. By August 2025, Carlyle moved to exercise “step-in rights” effectively converting its debt position into equity control, suggesting the business underperformed projections or breached financial covenants. This ownership flux creates uncertainty for the private credit lenders, who must now navigate potential restructuring negotiations with new management potentially seeking to impair their positions. The Very Group saga exemplifies private credit’s double-edged role: providing liquidity when no alternatives exist, but at premium pricing reflecting genuine risk that may crystallize .
Summary: Very Group’s £600 million private credit refinancing of maturing high-yield bonds demonstrates private credit’s role as lender-of-last-resort for distressed-adjacent borrowers closed out of public markets. Led by Arini Capital, the expensive facility provided liquidity runway but subsequent Carlyle change-of-control exercise highlights material credit risk lenders assumed, with premium spreads proving justified by underlying business and ownership challenges .
Source: AIMA – European Credit Markets, Sky News – Very Group
