The deal is occurring amid the late stages of a credit cycle. “We’ve had this unbelievable economic expansion for over a decade, so it’s not unusual for investors to be looking at more unusual sectors,” said Mayra Rodriguez Valladares, a bank regulatory and capital markets consultant in New York, referring to hospitals and private prisons.

For private equity, the Department of Defense is a safe, opaque bet. “It’s incredible how little we know of how Department of Defense decisions are made and how funds are channeled,” said Rodriguez Valladares