(Bloomberg) — Wealth management firm Mercer Advisors Inc. is looking to cut its borrowing costs by refinancing private debt with a $1.65 billion leveraged loan, the latest in a rush of companies ditching private credit loans for cheaper capital in the bank loan market.

The private equity-owned firm on Thursday priced the new seven-year loan with an interest rate of 2.75 percentage points over the floating-rate benchmark and at 99.75 cents on the dollar, according to a person with knowledge of the matter. The debt offering also included a $250 million delayed draw term loan, which will go toward funding acquisitions and other investments, said the person, who asked not to be identified because the information is private.

Mercer Advisors, which oversees about $111 billion in client assets, will use the proceeds to refinance around $1.6 billion in existing debt from private credit firms, according to the person. Existing lenders on the debt, which carries a rate of 4.5 percentage points over the benchmark, include KKR & Co., Ares Management Corp., BlackRock Inc. and funds managed by Apollo Global Management Inc., including a MidCap Financial fund, regulatory filings show.

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The refinancing cuts the company’s borrowing margin by 1.75 percentage points, saving about $29 million annually.

“This refinancing is a natural next step for us,” said Gün Keresteci, Mercer’s chief financial officer, who added lower costs will give the firm flexibility to better serve clients.

Representatives for private equity owner Oak Hill Capital and Goldman Sachs Group Inc., which led the refinancing, declined to comment.

So far this year, more risky borrowers have been refinancing private debt in the syndicated markets rather than the other way around. Just $9.2 billion of broadly syndicated loans have been refinanced into private credit this year, while $19.5 billion has gone the other way, according to data from JPMorgan Chase & Co. and KBRA DLD published Thursday.

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“If borrowers have the ability to access the broadly syndicated market today and it’s not a complicated financing, they are probably going to favor that market because it’s strictly a cost of capital conversation and they can save more in that market,” said Michael Moore, a managing director at DC Advisory.