The Dallas and New York Federal Reserve banks plan to launch a pilot survey into the estimated $1.3 trillion private credit market after the end of the third quarter. The survey will provide insights into the availability of credit, credit provision, and the evolution of lending standards in private credit markets.
Private Credit Market Overview
Private credit has expanded as a means of funding private equity groups’ buyouts after the 2008 financial crisis saw bank financing dry up. It has become a prime source of debt financing for riskier businesses, drawing in capital from income-hungry investors. However, the sector has been dogged by concerns over the quality of lending standards and a lack of transparency.
The survey will segment the market into three sections based on borrower size: an upper middle market with more than $100 million in earnings before interest, taxes, depreciation, and amortization; a middle market between $30 million and $100 million EBITDA; and a lower middle market with less than $30 million EBITDA.
Findings of the survey are expected to be published in the first quarter of 2027. Regulators have struggled to assess the potential dangers of private credit to banks due to a dearth of data and the inability to force the unregulated industry to disclose information.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
