How Do Covenants for Private Credit Loans Compare to Broadly Syndicated Loans? Download FitchRating’s Report here. While liability management exercises (LMEs) are not necessarily prohibited in direct lending documents, they are considerably less common than in the BSL market. We have yet to observe LMEs in the private credit portfolio rated for asset managers…. Subscribe
Family offices warm to Infrastructure, private debt, and hedge funds Private equity is the main alternative asset class for family offices, with 58% of those tracked by Preqin active in the strategy, ahead of real estate (46%). However, while just 21% of family offices are active in hedge funds and private debt and 20% in…
1Q24 US Leveraged volume up 46% year over year; Highest quarterly total in over 2 years US leveraged lenders completed US$347.5bn of issuance across the high yield bond and leveraged loan markets in 1Q24, a 46% increase compared to the same time last year and the strongest quarterly results since 4Q21. More interesting was the…
What is Driving Increasing Deal Sizes in Private Credit? Direct lenders have increasingly been targeting larger companies, after previously focusing on middle market sized companies. (Fitch loosely defines larger as companies with about $500 million of debt and about $100 million of EBITDA or above)… Subscribe to Read MoreAlready a member? Log in here...
The rise of quasi-distress As fund managers become adept at heading off problems before they threaten to kill companies off, distressed strategies are changing in nature. The news in August last year that Oaktree Capital Management was in the market with an ambitious $18 billion target for its latest opportunistic credit fund highlights the burgeoning…
Is stress emerging to save Asian fundraising? Last year was tough for GPs seeking capital to invest in Asia Pacific but distressed/opportunistic strategies were bucking the trend. Fundraising for private credit in Asia Pacific took a nasty hit in 2023, with just 11 funds reaching the finish line, compared with 33 the year before. The…
Defaults: Rates steady, but signs point to increases later this year Direct lending defaults and non-accruals are low, yet other key measures suggest there’s room for growth in both segments later this year and into 2025. Some expect fragile assets to start crumbling by the second half of 2024—there’s not much runway left after an…
Rising Payment-in-Kind Trends in Private Credit Will Have a Mixed Impact Interests paid-in-kind (PIK) are likely to rise among private middle-market loans in the US through both amendments to existing loans and as an optionality in new loan originations, as the impact of higher rates fully kicks in and credit burden builds up among borrowers….
Daily Analytic: Survey – Unitranche spreads shift lower Stiffer competition from the syndicated market has put pressure on direct lenders to tighten spreads on unitranche loans. According to LSEG LPC’s 2Q24 Middle Market Outlook Survey, 36% of direct lender respondents said their minimum threshold for unitranche spreads was in the 500-525bp range…. Subscribe to Read
North American-based private debt AUM hits $1tn Private debt in North America has overtaken real estate in 2023 to become the second largest private capital asset class by assets under management (AUM), topping $1tn for the first time. AUM grew 18% in H1 2023, faster than private equity (13%), and private capital markets overall (11%)….