In this quarterly update, we review the more than 2,200 KBRA assessments completed for 1,972 unique middle market (MM)-sponsored borrowers over the last 12 months (LTM) ending March 31, 2025. These companies collectively account for $983 billion in debt, offering a clear view of the overall direct lending market. We examine key trends shaping credit quality by company size and sector and describe the sectors where revenue growth is expected to slow the most amid broad market, tariff, and economic uncertainties. We also provide new data on the 425 surveillance assessments and 211 new assessments conducted in the first-quarter (Q1) 2025.
While the credit environment described in this KBRA report may appear benign, it is important to note that the data is based on the financial results available as of the assessment date, which are often subject to a reporting lag of approximately 45 to 90 days. As such, the metrics in this LTM period precede recent market developments. New macroeconomic…