Chart of the week Archives

Showing 1–6 insights out of 12 results

Volatility highlights private credit lender protections

98% of lower middle market loans issued in 2024 included a covenant compared to just 10% for syndicated loans.

Column chart that divides new issuance volume in 2024 based on covenant protections. Among private loans, 72% of upper middle market loans (issuer EBITDA above $50M) included one or more covenants; 98% of lower middle market loans (issuer EBITDA of $50M or less) included a covenant compared to just 10% of syndicated loans. Issuer protections are less prevalent in the syndicated loan market, where loans are held by hundreds of investors with small tradable slices of exposure.

Private firms represent a dominant share of the loan market

Private firms account for 77% of issuers in the leveraged loan market today, highlighting the larger shift toward private markets.

Line chart showing the percentage of private and public companies that have issued leveraged loans since 2015. While private firms have issued the majority of loans over the past decade, the the gap between the two has widened significantly, from 59% private issuers in 2015 to 77% as of February 2025. The shift in the composition of the loan market highlights the larger growth of private credit, which represents a $1.1 trillion asset class today.

Private credit yield premium hits a four-year high

Private credit has traditionally offered a yield premium over public credit markets. It has widened meaningfully today. Spreads tell a similar story.

Line chart showing yield on upper middle market private credit and B-rated syndicated loans since November 2021. While the yield differential between the two has evolved over time, private credit’s yield premium reached a three year high as of January 31, 2025, and is nearly double its average since January 2021.

Middle market optimism reaches new heights

Middle market business leaders’ economic optimism reached an all-time high in Q4 2024, even as potential uncertainty edged up.

Line chart tracking optimism and uncertainty among global middle market business leaders since 2020. Over the past two years, middle market leaders’ optimism has grown from 60% to 76% as of Q4 2024. Uncertainty has trended modestly lower until the past quarter as leaders acknowledge the additional uncertainties a new U.S. administration could bring.

Private credit is a small fraction of the U.S. credit market

In contrast to the headlines, the primary story in private credit is the change in market share, not the change in market size.

$Column chart showing major corporate credit markets by size. The chart highlights how small the private credit market remains, despite it accounting for outsized press over the past year. Private credit represents approximately $1.25 trillion in the U.S. and $2 trillion globally, which represents a fraction of the investment grade ($9 trillion) and bank loan ($11 trillion) markets.$