On December 3rd, the OCC and FDIC announced they were withdrawing the Leveraged Lending Guidance they (with the Fed) had instituted in 2013. This guidance had been an outgrowth of the GFC which created widespread devaluation of bank balance sheets globally.
Though the proximal cause of the downturn was poor sub-prime mortgage underwriting that spread like wildfire through the banking system, regulators had long identified “risky loans,” i.e. loans with high leverage used in financing private equity buyouts, as a similar threat that needed additional supervision and oversight to protect from systemic risk...
“While we believe that a [Venezuelan debt] restructuring is very unlikely to occur in 2026, we think the market will begin to price in a more optimistic scenario on progress for an eventual restructuring.” – Anthony Simond, investment director, emerging market debt, Aberdeen Investments (Barrons)
Featuring Charts
Chart of the Week: Private Credit Doubles
Direct lending and BDCs expected to lead the growth of private credit. Source: Fitch Ratings
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Chart of the Week: Premium Outlet
The private credit yield advantage over BSL widens as single-B spreads shrink. Source: KBRA DLD Research, PitchBook LCD
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Chart of the Week: Easing Down
Defaults for the overall leveraged loan market are at lowest point since 2023. Source: The Daily Shot, PitchBook/LCD, Morningstar LSTA US Leveraged Loan Index
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Chart of the Week: Prime Cut
A low probability just weeks ago, chances for a 25 bp cut now seem likely. Source: The Daily Shot
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Chart of the Week: Lower for Longer
Direct lending defaults lead credit categories in low defaults, though headed higher. Source: KBRA DLD Default Research
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Chart of the Week: Higher for Longer
Larger LBO financings in direct lending are sporting increasingly higher leverage. Source: KBRA DLD Research, 3-month rolling averages
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Features
The Pulse of Private Equity – 1/5/2026
Carveout/divestiture count as a share of all PE middle-market deals by quarter Download PitchBook’s Report here. While quarterly figures can fluctuate, annual trends provide a clearer benchmark, showcasing that carveouts are a core deal type for sponsors…. Subscribe to Read MoreAlready a member? Log in here...
Bloomberg: Leveraged Lending Insights – 1/5/2026
US Leveraged Loan Pricings Remain Elevated in 2025 2025 was another busy year for the US institutional leveraged loan market, with 901 deals for $987.3b pricing over the last twelve months. The figure represents a 25.8% decline from last year’s record-setting volume of $1.3t but is still up significantly from 2023 figure of $376.6b…. Subscribe
PDI Picks – 1/5/2026
Capital flowing into private debt funds Preliminary data shows capital raising enjoyed a reasonably prolific year in 2025, nudging ahead of the previous year’s total. Last year turned out to be a strong, if not spectacular, year for private debt fundraising globally. With the fourth quarter ending up the most prolific quarter of the year,…
Middle Market & Private Credit – 1/5/2026
Private Credit Outlook 2026 Click here to download report. The global private credit market will continue to grow in scale and complexity in 2026, having become much more diversified and widely held over the past decade…. Subscribe to Read MoreAlready a member? Log in here...
Leveraged Loan Insight & Analysis – 1/5/2026
2025 US M&A loan volume jumps 43% to mark 4-year high at US$482bn US lenders completed over US$482bn in M&A loan volume in 2025, an increase of 43% compared to 2024 totals and the strongest results in 4 years…. Subscribe to Read MoreAlready a member? Log in here...
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Beginning in July 2022 The Lead Left published a series of articles on credit market. This report consolidates those articles.
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. … Subscribe to Read MoreAlready a member? Log in here Related posts: 2H 2021 Midyear Outlook Report State of the Capital Markets – Fourth Quarter 2016 Review and
Beginning in September 2021 The Lead Left published a series of articles on supply chain. This report consolidates those articles.
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