It’s getting more expensive to borrow via private credit. According to AnnaMaria Andriotis, lenders are withholding perks and incentives they had been giving to borrowers to win their business. She writes:
On new loan originations, lenders are tacking a bigger margin on to the base interest rates, especially for larger companies. For companies with more than $100 million in earnings before interest, taxes, depreciation and amortization, the median margin on a common structure of new debt issued in the direct-lending market was 5.13% in May, compared with 5% in April and 4.88% in March, according to investment-banking adviser Lincoln International. That is the highest it has been in nearly two years.
The researchers behind Andriotis’s data, Lincoln International, discussed private credit loan pricing in a podcast. Listen:
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Read more about private credit in my series: Private Equity Is the Next Big Thing Coming for YOU.
