Private Credit Myth #2: Private credit is the next market bubble

We continue our special series this week with: Myth #2: “Private credit is the next market bubble.” It’s a myth that’s applied regularly to leverage loans. The universe of broadly syndicated loans is as large as that of high-yield bonds, so that must be a bad thing. But growth in loans is a classic result […]

Private Credit Myth #1: Private credit is a crowded space

With our discussion last week of the relationship between age and happiness, some readers asked us: Ok, what country has the happiest residents? According to the World Happiness Report, Finland topped a list of 156 countries. The US was 19th, and South Sudan as the least cheerful place to live. Finland is a surprising outcome, […]

Private Credit Myths: Introduction

A Dartmouth College professor has found that middle age is even more depressing than we thought. But things start looking up pretty quickly after that. In a recently published study, David Blanchflower found unhappiness is a U-shaped curve, bottoming out when people are 47.2 years old. But after that, people start feeling better. By the […]

2020 Hindsight in Leveraged Loans

Remember your summer internships in high school? Neither do we.   Wolf Cukier’s stint at NASA’s Goddard Space Flight Center last summer could have been equally forgetful. The Scarsdale, NY teenager began it by searching for anomalous star patterns amid reams of satellite data.   On his third day he noted an odd image near […]

Private Credit: “Still the Best Place to Be”

Investors today are faced with mixed signals. November’s impressive labor report of 266,000 job gains went a long way to easing fears of an imminent recession. But with buoyant markets brought fresh bubble fears: Are prices overinflating? Are valuations headed for a bigger fall down the road? And won’t terms and structures continue to weaken […]

Private Credit Risk: Where Are We Now?

As a long-term participant in the #CreditMarkets, we’ve learned the most intriguing times are not when things are going swimmingly for issuers or investors. Life is becomes interesting when trends begin to shift, at the inflection points. These are often apparent only in hindsight. The Great Recession, for example, ended in June, 2009 – barely […]

The Costs of Senior Stretch and Unitranche

“Where to draw the line is also key as we examine #SeniorStretch and #unitranche loans. Besides leverage and loan-to-value, yield is helpful in identifying these financings. Unitranche is a one-stop solution blending senior and junior tranches into one. With more than thirty unitranche suppliers out there, leverage and pricing reflect competition among those firms, rather […]

Where’s the Line Between Senior Stretch and Unitranche?

This week we fearlessly tackle one of the most frequently asked questions in private credit: Namely, where do you draw the line between a #SeniorStretch loan and a #Unitranche? It’s a topic that’s gained increasing traction as issuer leverage has risen steadily, going back well before the financial crisis. Back in the early 2000’s when […]