Media

SuperReturn Private Credit US

We reported (in person!) this week from the SuperReturn Private Credit conference in Chicago, an event that always attracts top-shelf credit investors and managers. In a keynote interview with economist and former Federal Reserve governor, Randall Kroszner, we explored the contrast between two US economies: Covid-challenged, like restaurants, that are still in a recession, and […]

Private Credit in Full

News reached us recently of a young walrus that had wandered south from his Arctic range in search of ice floes. Landing in Ireland, Wally began boarding luxury yachts. The property damage turned the whiskered wayfarer from “visiting celebrity to public enemy number one.” It all worked out, though, when a marine biologist enticed the […]

A Market in Full: Liquid Credit

Of the many unanticipated consequences of Covid, one catching our eye was the recent NYT headline: “Birds Thrived During Lockdowns.” Seems that while we were stuck at home last spring, our feathered friends were out partying. Urban areas, otherwise crowding out some species, saw hummingbirds and bald eagles return at 14 times pre-pandemic levels. “I […]

Supply Chain Lessons Learned

Last fall, the Harvard Business Review examined Covid’s impact on supply chains. The pandemic, they wrote, “exposed vulnerabilities in the production strategies and supply chains of firms just about everywhere,” The study also presciently identified “the growing electronics content in modern vehicles” as a potential bottleneck. Today we are witnessing how the shortage of semiconductor […]

PE and Supply Chains

Even in normal times, private equity sponsors pay ruthless attention to cost structures of portfolio companies. Covid has raised to new levels the challenges buyers have managing supply chains. “Eighteen months ago, Covid was a top-line issue; now it’s mostly a cost issue,” one partner told us. “We can pass price increases along, but with […]

Deal Flow and Bandwidth Issues

Before Covid the persistent view of private credit was too much capital chasing too few deals. Transaction inflation was resulting in tight spreads, high leverage and weak terms. When Covid hit this balance shifted dramatically in favor of the investor. Deal supply dried up, lenders retreated, and terms strengthed. But within weeks central bank liquidity […]

Supply Chains and Labor Examined

One of the more fascinating aspects of the past 18 months has been watching the divergent economic narratives between headlines and data. The Bureau of Labor Statistics reported a record high 10.9 million job openings in July. The three largest sectors comprising this increase were healthcare, finance, and food services. Yet there also less than […]

Supply Chain Blues: Out of Stock!

Last spring we were shopping for garage doors. Lumber prices had skyrocketed – almost to the price of gold. So we chose steel. As did everyone else. Wood is now cheaper. And we’re still waiting for our doors. The industry publication Supply Chain Management Review reported that 2021 is on a record pace for factory […]

Outlook For Unitranche Financing

“The unitranche was invented in response to broken capital markets, when banks were backing away. Today it’s thriving when markets are booming.” The size of these financings has also grown dramatically. How large could they get? We remember the same questions being asked about broadly syndicated loans in 2007. If the largest direct lenders collaborate, […]

Unitranches vs. Bank Loans

According to Refinitiv LPC, US unitranche volume came to almost $22 billion last quarter – the highest level they’ve tracked historically. At the same time, one-stop risk/return dynamics have moved in favor of issuers. The average debt/ebitda is now at a record high 5.9x, with all-in Libor spreads hovering around 600 bps. As we told […]