Private Credit, Wall Street’s Hottest Trade, Has an Ugly Moment
- PE-backed company shifts collateral away from private lenders
- Observers say it’s reminiscent of aggressive loan market moves
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For years, as private credit exploded into a $1.7 trillion industry, the line from the market’s biggest players was that their deals were, simply put, safer.
Certainly safer than the high-yield bond market, and also safer than the leveraged loan market, where struggling companies could take advantage of weak investor safeguards and team up with hedge funds to aggressively restructure their debt at the expense of existing creditors.