This week we acquainted ourselves with fun facts about solar eclipses. One is the fortuitousness of size and distance. If the Moon was slightly smaller or further away from Earth, there would be no totality.

This coincidence is also impermanent. Apparently, the Moon is creeping away from our planet at the rate of 1.5 inches per year. It’ll take time, but eventually this retreat will eliminate the possibility of future total eclipses. Their infrequency in the US (the next one happens on August 23, 2044) is also why so many planned to view this one.

Many variables, including weather, went into witnessing the extraordinary spectacle in the sky this week. The same can be said of successful private credit portfolio construction. Experienced managers have developed well-honed processes to deal with expected (and unexpected) risks...

The last of the economic bears are throwing in the towel.” – Joe Brusuelas, chief economist, RSM US.

Featuring Charts

Chart of the Week: Honey, I Shrunk the Interest Coverage Cushions

April 10, 2024

The Fed’s “higher-for-longer” has compressed leverage loan coverage ratios. Source: PitchBook | LCD(Past performance is no guarantee of future results.)

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Chart of the Week: All About Portfolios

April 3, 2024

Top three criteria investors use to select credit managers are portfolio-centric. Source: Coalition Greenwich 2023 Private Credit Market Structure Study(Past performance is no guarantee of future results.)

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Chart of the Week: Stepping Down

March 26, 2024

Private borrower covenant (not payment) default rates fell for third straight quarter.  Source: Lincoln International Proprietary Private Market Database(Past performance is no guarantee of future results.)

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Chart of the Week: Refi Madness

March 19, 2024

The reversal of refinancings between direct lenders and the liquid market is dramatic. Source: PitchBook LCD(Past performance is no guarantee of future results.)

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Chart of the Week: Spready as She Goes

March 12, 2024

Despite modest spread softening, direct lending yields remain at record levels. Source: LSEG LPC(Past performance is no guarantee of future results.)

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Chart of the Week: Vehicle Sales

March 5, 2024

New CLO formation so far in 2024 has been the second fastest start ever. Source: PitchBook LCD (Past performance is no guarantee of future results.)

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Features

Private Debt Intelligence – 4/8/2024

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…

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Leveraged Loan Insight & Analysis – 4/8/2024

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…

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Middle Market & Private Credit – 4/8/2024

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)… Login to Read More...

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PDI Picks – 4/8/2024

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…

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PDI Picks – 4/1/2024

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…

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