Private Credit Financial Structures and Customs

[Joe Leote]

I am fifteen minutes into this video and already learning much more than I knew about Private Credit business customs:

Private Credit: Even Apollo's Trapped Investors. The Best Explanation of Exactly What's Happening

Business Development Corporations are federally regulated firms that leverage equity with debt to extend private loans:

Demystifying the Three Main BDC Structures

Banks can lend to Private Credit firms. This recent article is claims to describe Private Credit fundamentals versus headlines:

Private Credit Under the Microscope – Separating Headlines from Fundamentals | J.P. Morgan Private Bank U.S.

Joe

[William Meyer]

Ya definitely a storm brewing here.  Another cute trick they use is NAV loans.

https://en.wikipedia.org/wiki/NAV_lending

A lot of boilerplate language here but the bottom line is that weak PE companies don't have to rely solely on their own balance sheets for additional funding.  To avoid reputational damage , their PE backers can borrow against their entire portfolio to give to the weak.  

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[Joe Leote]

Retail investor describes attributes of the Private Credit market:

The Private Credit “Magic” Is Gone | Leyla Kunimoto on Redemptions in Semi-liquid Credit Vehicles

Joe