Private Credit: Q2 2024 Middle Market Borrower Surveillance Compendium–EBITDA to the Rescue

In KBRA’s Q2 middle market (MM) surveillance compendium, we examine how revenue and EBITDA growth have cushioned the blow of higher interest costs among private credit borrowers. The analysis is especially interesting due to the dearth of observed defaults so far, relative to our expectations. In this report, we take a deep dive into three-year revenue, EBITDA, and interest coverage ratio (ICR) trends for 1,067 unique MM names that KBRA has assessed in first-half (1H) 2024.¹ In addition, we also provide new data related to the surveillance of 396 MM corporate credit assessments and the 171 new assessments assigned in Q2 2024. KBRA has performed over 3,500 corporate credit assessments over the past two years, and the data related to these assessments continue to provide unique insight into the otherwise opaque direct lending landscape. KBRA monitors these credit assessments as part of the surveillance of hundreds of KBRA-rated private credit feeder…