Insights & Learnings

Private equity sponsors have several options when structuring a debt financing. They may partner with a single direct lender, assemble a small club of lenders, or access the broadly syndicated loan (“BSL”) market, where dozens of institutions may participate in a single capital structure. While each approach can deliver capital, they differ meaningfully in how risk is governed, how information flows, and how effectively lenders and sponsors can respond when conditions change.Continue Reading

The Federal Reserve cut interest rates again last week, a move that has many investors reevaluating their fixed income allocations. While private credit is often celebrated as a winning strategy in rising rate environments, it’s also uniquely positioned to perform well when rates begin to decline.Continue Reading

PIK is a financing mechanism that allows borrowers to pay interest with additional debt rather than cash. While this tool can temporarily relieve liquidity pressure, it does so by increasing future repayment obligations and repayment risk. Historically, PIK was primarily associated with distressed credit. Today, however, given elevated corporate leverage and the higher cost of debt in an elevated interest rate environment, many private credit managers are increasingly introducing PIK even into senior loan structures.Continue Reading

With lower interest rates and spread compression, many investors are questioning the attractiveness of private credit as loan yields shrink and competition heats up. The core middle market has remained resilient to spread compression, driven by less competition compared to the crowded upper middle market and banks.Continue Reading