In this quarterly update, we review the more than 2,200 KBRA assessments completed for 1,903 unique middle market (MM)-sponsored borrowers in 2024. These companies collectively account for $922 billion in debt, offering a clear view of the overall private credit direct lending market. We examine key trends shaping credit quality by company size and sector. In addition, we identify and describe the roughly 5% of companies in this portfolio that appear most at risk to default in 2025, given expectations for prolonged base rates, fundamentally weak performance, and limited financial flexibility.
We also provide new data on the 496 surveillance assessments and 199 new assessments conducted in fourth-quarter (Q4) 2024.
Key Takeaways
In 2024, strong revenue growth (17% compounded annual growth rate (CAGR)1 over three LTM periods) and even stronger EBITDA growth (33% CAGR over three LTM periods) helped most MM borrowers withstand the impact of…
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