PC lenders using PIK, receivables to support borrowers – Morrison Foerster

Tammy Davies and James Newton were interviewed by Sami Vukelj at Pitchbook to discuss the state of the private credit market with borrowers experiencing elevated distressed activity and how lenders are responding.

James mentioned that this is “likely in part due to smaller borrower size common among direct lending issuers, in the face of higher interest costs.”

Tammy noted, “Lenders give runway to borrowers in different ways, and while the ‘how’ depends on the business profile of the company, it is also largely dictated by the track-record that the lender has with the sponsor. If a lender has a long-standing relationship with a sponsor, either through portfolio concentration or where they have successfully navigated stressed situations together, they are more likely to be flexible.”

Read the Pitchbook article.