Panel: The evolution of private credit in a restructuring context
Alternative asset managers such as Ares, Blackstone, Apollo, Brookfield, KKR and Carlyle have roughly doubled commitments to private credit since the end of 2019. This has fuelled the growth in the private credit market to be comparable with syndicated loans and high-yield markets in the US. Unlike the syndicated loan market, private credit has seen comparatively stable valuations during economically challenging times, but despite this, credit conditions are expected to worsen. Direct lenders typically have closer relationships with borrowers and have shown a willingness to get involved with sponsors and troubled borrowers during tough times to negotiate debt workouts which has minimised traditional defaults. However, public and private credit borrowers are both subject to today’s market challenges and factors that have steadied borrowers are starting to erode. This panel will discuss:
- How are tighter margins and thinner leverage affecting private lenders today?
- How high is the average asset-quality risk for private creditors and is this sustainable?
- Are private credit funds keeping afloat ‘zombie companies’ longer than is necessary to avoid bankruptcy? What will the long-term impacts be of this on the restructuring market?
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