Lafayette Square Secures $65 Million in Private Placement Following Investment-Grade Rating
Lafayette Square's successful $65 million private placement demonstrates growing institutional investor confidence in working-class market investments, supported by its recent BBB credit rating and strong financial performance.
Lafayette Square has completed a $65 million private placement of senior notes to qualified institutional investors, marking a significant capital raise for the private credit firm. The senior notes carry a 7.00% fixed interest rate and mature on August 19, 2030, providing the company with substantial funding for its lending operations. This transaction follows closely on the heels of Morningstar DBRS awarding Lafayette Square a Long-Term Issuer Rating and Long-Term Senior Debt credit rating of BBB (low) with a Stable Trend, reflecting the firm's strong operational performance and conservative financial management.
The rating agency's assessment, detailed in the full Morningstar DBRS rating report, highlights Lafayette Square's improved profitability, strong dividend coverage, and consistent credit performance. The firm's diversified portfolio and risk reduction strategies, including enhanced managerial assistance and data-driven origination, contributed to the investment-grade rating. This financial validation comes at a crucial time as the company expands its lending activities to middle market companies in working-class communities.
Goldman Sachs served as the lead placement agent for the transaction, with Raymond James and Keefe, Bruyette & Woods, A Stifel Company, acting as co-placement agents. The successful placement demonstrates institutional investors' growing interest in what Lafayette Square founder and CEO Damien Dwin describes as "working-class people and places." Dwin emphasized that shareholders benefit from the diversification presented by this transaction alongside the company's existing low-cost liabilities from the U.S. Small Business Administration.
The capital raise follows Lafayette Square's second quarter earnings report filed on August 2, 2025, through its Form 10-Q and Form 8-K, which included a comprehensive results presentation summarizing financial and performance metrics for the quarter ended June 30, 2025. The company's focus on non-sponsored deals, enhanced managerial assistance through its Worker Solutions platform, and technology-first investment strategy through Potomac X Lafayette Square differentiates it in the private credit market.
This transaction represents a significant milestone for Lafayette Square's mission to support working-class job creation and investment in underserved communities. The firm aims to support 100,000 working-class jobs, invest 50% of capital in working-class places, and curate benefits for 50% of its portfolio by 2030. The successful $65 million placement, combined with the investment-grade rating, positions Lafayette Square to accelerate its impact investing strategy while maintaining conservative underwriting standards and risk management practices.