The clock is ticking on interest rate hikes. Who will win the fight on inflation: the Fed with a soft landing or a recession with a hard one? The answer could either push buyers deeper into illiquid credit or reinforce indecision.

But private credit has never been a timing game. Opportunistic, distressed and liquid credit are influenced by market or economic conditions. Since private credit doesn’t trade its returns depend on all-in coupons, fees and principal repayments. Minimize losses and you drive alpha. But can that be done through all cycles?

Long-term data suggests middle market loan recoveries are better than BSLs because direct lenders in tight buy-and-hold groups cooperate to improve outcomes. Larger syndicates are often composed of funds with different strategies and entry prices, making workout coordination a challenge...

Quote of the Week

“Let’s keep in mind, 50 basis points is fast; 75 basis points is really fast.” – Ellen Meade, research professor, economics, Duke University.

Featuring Charts

Chart of the Week: Bucking the Trend

November 30, 2022

YTD high-yield loan and bond volume slid 63% and 76%, respectively; direct lending is up 77%.

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Chart of the Week: No Bond Bails

November 16, 2022

Since 1878 the worst stock market declines were helped by fixed income. Not now.

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Chart of the Week: Double-Digits

November 9, 2022

Higher spreads and increasing benchmark rate has pushed leveraged loan yields to 10%.

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Chart of the Week: Year of the Greenback

November 1, 2022

Attendees of our economics October 19 webinar are widely spread in their rate expectations.

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Chart of the Week: Guessing Game

October 25, 2022

Attendees of our economics October 19 webinar are widely spread in their rate expectations.

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Chart of the Week: Passing the Baton

October 19, 2022

Inflation has been squeezed out of goods, but services are carrying the ball.

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Features

Leveraged Loan Insight & Analysis – 11/28/2022

BDC recommendations shift towards “hold” since March BDC research analyst recommendations have been marked by a shift in recent months towards “hold” recommendations, a move away from the “strong buy” and “buy” recommendations observed since the first quarter of this year. Despite this shift, “strong buy” and “buy” still account for over half of all…

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Private Debt Intelligence – 11/28/2022

Venture debt fundraising gains momentum Venture capital fundraising fell after the public equities sell off in Q1 2022, which saw aggregate capital raised plummet from $72.5 in Q1 2022 to $11.1bn by Q3. However, more established early-stage companies may be able to access capital from the growing venture debt market…. Login to Read More...

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PDI Picks – 11/28/2022

Investors fix gaze on Asia-Pacific As private debt matures, under-developed markets in Asia and Europe are expected to come into their own. In a newly published report on the state of private credit, the Alternative Credit Council foresees the growth of private credit beyond the favoured markets of the US and UK. Many of the…

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The Pulse of Private Equity – 11/14/2022

A good year for carveouts Download PitchBook’s Report here. PE-led carveouts are having a good year, according to PitchBook’s Q3 US PE Breakdown. A healthy fourth quarter will bring 2022 in line with prior years, despite the sluggish market overall. Corporate America continues to struggle in this inflationary environment, creating opportunities to shed noncore assets to…

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Leveraged Loan Insight & Analysis – 11/14/2022

Direct lenders grab a larger share of large corporate volume As the US leveraged loan market continued to slow amidst wider market volatility in 3Q22, direct lenders stepped in, taking a greater share of large corporate leveraged loans. Private credit to US large corporate borrowers, those with revenues or loan sizes US$500m or higher, amassed…

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Special Report: The Great Unwind

September 28, 2022

Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.

2022 Capital Market Outlook Report

February 3, 2022

Cov-lite trends Inflation & rising interest rates – LIBOR to SOFR transition Mega-tranche uni trend ESG takes center stage Login to view interactive report and download PDF version. … Login to Read More...

Special Report: Supply Chain Blues

January 6, 2022

Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.