Private equity firms are taking advantage of a frothy credit market to pay themselves record sums with borrowed money, a controversial practice that critics say benefits buyout-firm executives but can harm portfolio companies.

Companies backed by US private-equity firms have taken on $58.5bn in dividend-recapitalisation debt this year through 20 October, S&P Global Market Intelligence's LCD unit said in response to a Wall Street Journal data request. That is more than levels of such debt for 2019 and 2020 combined. The previous full-year record of $51.1bn was set in 2013.