Private credit sector showing higher risk with firms struggling, potential impact on banks.
From Yahoo Finance: 2025-04-26 15:00:00
Private credit loans are posing a risk as companies struggle with cash flow, up from 25% in 2021 to over 40% in 2024. Trade wars add to concerns of economic stagnation. The $1.6 trillion private credit industry could impact banks with over $500 billion exposure.
Shadow banks face potential risks as private credit firms lend to weaker companies. Nonbank lenders in the US show signs of problems, with 21% of nonbank loans uncertain for repayment. Financial Stability Board plans to release policy recommendations to limit shadow banking risks.
Markets stabilize after trade war fears. American Express leads high-grade bond sales, with more companies expected to follow. Leveraged finance markets see sporadic sales. Private lenders provide $4 billion loan to support Thoma Bravo’s acquisition. Banks still arrange financing for risky companies amidst tariff-induced turmoil.
Rite Aid and WW International prepare for bankruptcy. Goldman Sachs and other Wall Street banks sell debt for Sycamore Partners’ buyout of UK pharmacy. Ascend Performance Materials files for bankruptcy. Brevan Howard Asset Management credit investor leaves amid market turmoil.
Neuberger Berman Group expands specialty-finance team with new hires. Royal Bank of Canada hires global head of private capital markets. Antara Capital founder joins Marshall Wace. Wall Street banks prepare for more debt sales as market stabilizes.