Private Credit: 2025 Trends and 2026 Outlook

Cahill Gordon’s industry leading and multi-disciplinary private credit partners will discuss the most intriguing big-picture trends of 2025 in credit/lending documentation, while also looking ahead to potential shifts in 2026. Cahill’s Private Credit Group advises many of the industry’s leaders in the space.

Speakers include: Peter G. Williams, Co-Head of Cahill’s Private Credit practice, and Cahill partners Sneha Jha and Dan Amato.

Introduction: Peter Williams is a partner and co-head of Cahill’s private credit practice. Prior to joining Cahill, Peter worked at a market leading direct lender and uses his experience to provide an insider’s perspective on direct lending transactions. He represents private credit firms in complex debt financing transactions.

Dan Amato is a partner in Cahill’s private credit group. Dan provides a comprehensive perspective to his clients with experience representing private credit funds, syndicated lenders and private equity sponsors and their portfolios in a broad range of transactions.

Sneha Jha is a partner in Cahill’s private credit group. Sneha provides an insider’s perspective to private credit transactions. Given her extensive experience at a market-leading direct lender. She represents private credit funds in complex debt financing transactions.

We are absolutely delighted to have our panel here today. Thank you very much for sharing your time and your expertise in this forum. And I will hand over to, to Peter.

Peter Williams: Thank you for having us and thank you to Termgrid for putting this on. It’s really nice to be with everyone this morning or afternoon depending on where in the world you are.

I am Peter Williams and I co-headed Cahill’s private credit group. What we focus on is predominantly direct lending. So today’s discussion is going to generally be on direct lending. Although obviously when folks say private credit, private credit is a pretty large tent. But I think today the focus will generally be on direct lending.

Maybe it wouldn’t be as catchy a title but it is really more of the same. The demand – supply dynamics, this wave of LBOs that many people had predicted may have been somewhat wishful thinking.

We have, we have a lot of private equity funds that may have various portfolio companies where there hold times are the sort of length where they would love to monetize, love to see some exits.

That being said, we haven’t necessarily seen a huge uptick in LBO activity. We’re still left with LBO issuance being muted. Thus private credit – which is still raising funds – having dry powder.

So finding deals to do and needing to make sure they’re seeing access to all the top LBOs because now we’ve had numerous years of private credit growth and expansion. You have a lot of funds now with scale and you have a lot of private equity sponsors also with scale. And what we are seeing is documentation evolving.

But we have found a bit of a middle ground, a plateau on LMEs. Of course you can’t have a private credit webinar without talking about LMEs because that is generally what everyone wants to hear about. So we will touch on that.

Similar to that is that maturation of the core in the upper middle market, where you’re seeing repeat players, repeat lender clubs. Obviously each deal is different, but at the same time, you’re seeing sponsors and lenders that have done plenty of deals together.

So there is a level of comfort, a level of understanding with respect to a lot of ancillary terms that have settled and somewhat normalized.

And then finally, similar to how folks have wished the LBO environment to take off, I think we might also have some folks on the more restructuring end of the spectrum that have wished for this restructuring wave to occur. And I just don’t think we have seen that.

We have definitely seen some idiosyncratic trends where certain sectors have seen some secular declines that can lead to some restructuring. But it’s not a broad base macro issue just yet.

I’m not saying that there aren’t various names that have idiosyncratic troubles and not everyone’s portfolio is 100% green. There’s definitely some watch list stuff. But I don’t think we have seen a complete shift to ‘Oh my gosh my portfolio is on fire, all my borrowers are in trouble’.

Once we recap the year, we will switch over to our crystal ball and what we are seeing in 2026. I think we will continue to see some LME evolution. Not necessarily with transactions utilizing LMEs, because – knock on wood – I don’t think we’ve seen much actual LME activity in practice in private credit.

That being said there’s still some movement on the actual terms themselves.

We’re continuing to see is that private credit is a big tent and there has been a lot of capital raise. With that I think there’s a lot of focus on general creativity and willingness to either lend into new areas, create new structures and really just expand what private credit can achieve. And we’ll talk about that a little bit.

Then finally we will leave some time for questions. So feel free to pepper us with anything you may have.

With that, I will turn over to my colleague Dan Amato. Maybe Dan if you could talk about – because you can’t have a private credit presentation without an LME discussion – maybe talk a little bit about LMEs and what we have seen from a documentation perspective throughout the year.

Dan: Of course. Thanks Peter. Without turning this into an LME presentation, I think we continue to see LMEs be an overriding focus in underwriting – particularly on sponsor based transactions.

It’s a significant focus for our entire portfolio of lender clients, from the largest to the smallest, even though we haven’t seen a corresponding increase in LME activity in private credit deals – other than a couple of very widely known examples such as Pluralsight – we have not really seen a widespread use of LMEs in private credit.

I think that speaks to the nature of the private credit lender, it is relationship lending. Generally repeat players who are lending to the same sponsors for their transactions over and over again.

That maturation has brought with it a little bit of a settling of terms on LME transactions. I think a year ago there was a lot more that was up for grabs and up for negotiation than there is now.

Things like J Crew and N Vision protection are fairly well settled at this point and are typical in both the largest and smallest deals for the largest and most aggressive sponsors to smaller sponsors and smaller private credit shops.

There is a little movement on Pluralsight protection and I think we see a range of approaches on that.

Some lenders want to ring fence specific assets, identify them by name, prevent them from being sold and require pay down even in large deals with blue chip sponsors. And it just goes to the nature of a lender and the transaction.

There are other deals where lenders are still willing to go without a Pluralsight protection and in many cases this is dependent on the relationship with the sponsor and whether or not it is a trusted actor, whether it is somebody that they ultimately believe is going to try and do an LME at some point in time.

The other protections? Chewy protection has become fairly standard. Nobody likes it but it exists and has been in the market for a long time.

There has been a little movement on at home and double dip. A year ago this was fairly new technology. Now, regardless of deal size, it ‘s fairly standard to require debt to non-gaurantors or unsubs to be supported to take away the at home double dip risk.

Similarly Certa protections have coalesced, requiring all affected lender consent to lien or payment subordination.

We have fairly standard exceptions that have trickled down from the syndicated loan market through the upper middle market and down into the core as well for dips and the standard litany of things that you see there.

Open market purchases is still a little up for grabs in the private credit market. Six months or a year ago, privately negotiated transactions on open market purchases was kind of a new term in private credit. I think it’s initially been pushed back on by lenders and I think there’s been mixed adaption of that point in the market.

Some larger deals you see that, without much debate or discussion. But I think certainly in the lower middle market and core middle market, that’s still a term that is up for grabs and one that’s negotiated deal by deal.

Peter: Dan are you seeing lenders show up and say ‘I need this specific language’? How is the negotiation on these deals? Is there some flexibility and how does that usually play out?

Dan: I think it depends on the lender and it depends on the transaction. It depends on their history with the borrow or sponsor.

There are certain deals where people show up with a list of named LME protections that must be included by name and you have to include them by name and they’re less focused on the actual formations of them.

There are other transactions, including very large ones – multi-billion dollar club deals – where people are very focused on the specific language of the LME protection, I think more similar to what you historically expect in a lower middle market deal.

So practise on that has really varied. It depends on experience and how many deals people have with each other and the degree of trust that exists.

Speaking of trust, the fact that there tends to be relationships with sponsors. Maybe setting aside non-sponsored deals – that’s a good segue to Sneha and just how we have seen the evolution of the club and the maturation of those terms. A lot of times its not a first impression. Are you aware if it’s a first time the lender’s ever seen a credit agreement or the first time the lender’s working with the sponsor? How have you seen that played out?

Sneha: Thanks Peter and thanks Dan. I think what has happened in the market is that everyone knows. Private credit has become such a formidable dominant force in sponsor financing. The sheer scale at which it is playing right now, this whole market has matured quite significantly.

In particular the upper and middle market deals, the relationships with sponsor are not diffused. They’re a concentrated group of top managers who’ve been providing flexible capital solutions for over a few decades now. So there are repeat players. It is a relationship business and at the core of it, the certainty of terms, the ease of execution that private credit can offer has been highlighted.

And because it is such a relationship driven business, in terms of the documentation structure, the flexibility, the terms being negotiated, there is a lot of understanding of both the business and the terms that, over the years, has happened as deals have evolved.

Particularly when you think about some of the largest deals that are happening in the private credit space. There is this evolution of the jumbo private loan – which are those billion dollar plus loans that we’ve all seen or heard about where that scale of the private credit lender is an incredibly important piece to the puzzle.

They have now been able to demonstrate that they can do deals north of $7 or $8 bn on the private credit side – underling the point that this market has grown and matured over the years.

In some ways what happens is that because it has become such a competitive market where lenders are competing on pricing, on leverage, on the cov lite flexibility in the upper middle and large cap deals that we have seen some terms around those evolve over the period.

W’ll get to how we think about 2026 and where the movement is. But to a large extent things have plateaued in the kind of deals that we’re seeing, the terms that we’re seeing in those deals.

As a natural next step, we are also seeing – because of those large sponsors participating in the more core middle market deals – that there is a certain amount of documentation pressure that is placed on those deals as well.

So we are moving from the upper middle market space to the middle market and seeing a certain kind of pressure on the documentation terms over there.

The kinds of terms that we see most negotiated would be things around incremental debt capacity, whether it comes to the MFN terms, MFN sunset, whether it comes to what is the capacity itself – particularly when you look at what is the capacity itself, the unsecured debt capacity.

There is some back and forth around whether you should permit a no worse than test in certain instances, whether it should be limited to permitted acquisitions, whether it should be about certain very specific needs that the business has.

We have also seen in the upper middle market space, deals getting cleared with no amort in certain circumstances so just a straight bullet repayment would be there.

There is some back and forth around what happens with DDTL use of proceeds, particularly when it comes to things like general corporate purposes.

Outside of that what I am seeing is that EBITDA add backs continue to remain a big focus. All of the basket capacity, everything around LME, at the crux of it it will come down to how you look at EBITDA and how you think of the credit and the business as a consequence of that.

So there is a lot of focus on the revenue synergies and add-backs related to that. There are some other things that we’ve seen of late where, assets, sales step downs have become quite common in the market – which maybe 8-12 months back wasn’t necessarily as common. But these are terms which I would say are much more upper mid market terms.

There is a pressure which is being placed on middle market documents and deals, particularly with the larger lenders and the larger sponsors playing there.

I think the other things that everyone will always remain focused around is the pricing and the economics. We are seeing some movement around the leverage and pricing, but to a large extent, some of that has now, as as we are almost closing the year, lateraled out – at least as far as pricing is concerned.

So maybe with that Peter I will turn it over to you and particularly the distinction between the BSL and private credit space as to what you are seeing from that perspective.

Peter: You make some interesting points around just the fact that in, especially in the upper middle market, you have a known quantity of lender and a top tier sponsor set that seems to be continually focusing on using private credit.

An interesting question we got in the chat is ‘you say sponsors their fiduciary duty to their LPs is to maximize returns. So how are lenders getting comfortable with any LME leakage notwithstanding their relationships. But if a sponsor is supposed to maximize returns and there’s an LME loophole – isn’t it a recipe for a sponsor to use that loophole.

I think that the point I would make is that private credit does have even relative to the BSL market – and we have done some exercises where we’ve looked at BSL and private credit docs – and BSL a lot of it is ‘does your document have Certa?’ And the answer is just yes or no. It’s not ‘does your document have Certa and what’s the actual Certa language?’ Private credit is ‘does your document have Certa and what are the carve outs? What are the various conditions?’

While there may in certain trends especially in upper middle market deals, there may be certain ares that have more holes than others, I do think from a totality what we’re seeing is that the LME protections in private credit are just wholesale better. They’re not, they’re not perfect, but when we’re thinking about relative to BSL, they’re better.

When you layer in the fact that they’re better protections when you think about a sponsor and you think about a situation that hasn’t gone as planned, I think we’re finding that the actual juice is not worth the squeeze. Even if there’s a small area and a document they may be able to exploit for purposes of doing something LME-espque the actual return on that and the ability for a sponsor to use that maneuver to then see themselves getting some optionality, getting some return. My hunch is that in a lot of the scenarios actually working with your small lender club to effectuate a restructuring of some sort of other solution is probably the more likely path to enhance those returns.

And I would say that in those situations, no one is happy right? Obviously the underwrite has not gone to plan. But again the private credit does have some guardrails on the types of LMEs you can do.

I think we’re seeing a lot of times in those situations that the LME path is a lot more fraught and it’s more expensive. It’s more uncertain in terms of the actual outcomes than a direct conversation with your counterparty, who you have probably worked with repeatedly and have a good relationship.

Again, no one is happy to have those discussions but that consensual solution, as opposed to the LME solution, tends to be the more travelled down path.

Then direct lending is itself a bunch of different categories right? There’s lower middle market, there’s middle market and there’s upper middle market. As you move into the various categories there’s some overlap and there’s certain sponsors that will do deals in the middle market and they’ll do bigger deals too.

So some terms can be somewhat similar. But there’s definitely very much terms that reflect a lower middle market deal. A lower middle market deal we are still seeing covenants.

It’s the upper middle market that I think get a little bit squishy.

Frankly even the definition of middle market – a couple of years ago I would have heard people say $20-40mn EBITDA was middle market. Now it might be whatever your particular LP pitch deck says is the middle market.

That’s an area where the middle market seems caught in both worlds, where we’re seeing some term creep filter down as sponsors that do large cap deal also do more middle market deals.

We’ll see lenders participating both in the large cap and middle market. So they might be more accustomed to seeing some of the more aggressive terms. And that’s where – where we were last year to where we are now – that could be an area where terms in the middle market have moved to a more advantageous place for a borrower relative to a lender.

As we’ve seen some limited supply and we’ve seen some good credits trade. Performing credit lenders, senior secured lenders do want to do good deals. They would rather do a good credit with okay terms than a bad credit with really tight terms.

If your fund focuses on distress, that’s a different analysis there. But the majority of what we see is more performing middle and upper middle market credits – in which case you’re willing to sacrifice some basket capacity here and there as a lender. You’d rather lend to that good credit as opposed to being a lender of last resort where sure you might have tight terms – but those tight terms come with a credit that is deserving of tight terms.

So we are seeing a lot of pressure in that middle market. The lower middle market – because those deals are a little bit more specialized in that they’re smaller, there’s certain lenders that are a little more inflexible in terms and its reflective of the credit – those terms are still staying relatively tight.

I think if you look at a lower middle market doc now vs 12 months ago, vs 24, vs 30 and keep going back in time, you’re going to see growers, you’re going to see various baskets that you probably wouldn’t have seen a year, 2, 3, 4, 5 years ago. So the term creep is real and it’s definitely happening.

I just think that the rate of acceleration in the lower middle market is a touch slower than the middle market and obviously the upper middle market where you’re competing with the broadly syndicated loan and you almost necessarily have to be a little more flexible because the sponsor does have the BSL option.

And through that Dan when we think about the lower middle market, the upper middle market and how do we think through about exit planning. Now that we have credits that may be a little longer in the tooth, how are folks working through that in their structures?

Dan: I think we’ve seen diversification in structures, particularly on exit planning over the last year, really two years and perhaps a little longer.

Traditionally it was either you were thinking about an IPO or a sale and – potentially hopefully not a downside – but sponsors have found more and more creative ways to exit their investments or to return capital to their investors and certainly a proliferation of structures within the debt documentation.

One particular feature that we’ve seen in refinancings from the syndicated market into the private credit market is the introduction of portability. It’s obviously a more friendly term in the private credit market than it is in syndicated markets.

We’ve seen that in a couple of different instances, which have allowed the debt to ride through in a trade – particularly in a deal that we’ve worked on recently. We’ve also seen increasing cases of recapitalizations or minority investments rolling over an existing sponsor’s interest into a new investment as a new investor comes in taking a majority.

There have been a couple public examples of that around, PCI Pharma for example. We’ve also seen a rise in GP-led secondaries. Obviously a couple of larger private credit funds have been very active fundraising in this space and announcing returns returns lately. This has really become a booming area of the private credit market and one that we expect to see develop over the next couple of years as LP interest becomes more actively traded, continuation vehicles are continuing to be used and firms are lining up to finance those types of transactions. It provides an easier way to return liquidity without a sale or an IPO or a new minority investor.

As private credit continues to mature and diversify its product base out of traditional, purely direct lending, this seems like a natural area for it to transition to as loans are being repaid and traded off.

Peter: Maybe as we think about ’25, which seems a little bit settled in, the dynamics are one of lowish volumes of LBOs and lenders again flush with dry powder. So you have some natural term pressure there.

That being said you still have the LME aspect where lenders are loser focused on that. Where do go from here? I definitely think that over the last few months – and maybe if you want to go to the third slide – as we think about into ’26 where do we go from here given we have a mature market, private credit lenders that seemingly have dry powder, private equity sponsors that seemingly need to be gearing up for exits, how are you thinking about the end of this year and into next year? What’s the feeling from the boots on the ground?

Sneha: I think this was something I was getting to earlier where – given the level of focus that exists on the terms around EBITDA and it is unique to each business – there is a whole lot of negotiation that happens around there, on certain items just to be clear.

It’s not that the whole EBITDA is necessarily being negotiated but everyone is focused on the cost savings, add backs and the proliferation of revenue synergies as a next step in that. So we are increasingly seeing much more around asks revenue synergies.

This also ties into something that we are seeing much more, in particularly the more than $50 mn EBITDA businesses, where deals have been cleared on cov lite terms. That’s become way more common than it would have been say even last year. I think maybe over a third of deals – and we were looking through some of the data – have cleared with cov lite terms in that greater than $50 mn EBITDA space, which is quite significant.

Now this doesn’t necessarily – I keep harping on the size of the business because, and all of us have been making that distinction, there are different spaces in which all the direct lenders are operating in, so some of this doesn’t necessarily go to a lower middle market as to the outlook for 2026.

Certainly we expect to see more pressure around cov lite deals as the landscape becomes more and more competitive, we expect to see the pressure around revenue synergies, add backs being included, tto what extent – it comes down to the nature of it.

Beyond that I think that there are some of the other terms that we were talking about, whether it’s incremental debt or terms around bullet repayment and no amort. I think that will continue to grow as the market continues to be competitive.

We’ve also seen in this past year much more PIK being upfront as a flexibility tool and that is a distinction that private credit can always use in ways that it is not offered necessarily in the broadly syndicated market. So that is something that we’ve seen quite often happen here.

I suspect that it could continue to be that way. So there is some of that push and pull that we will continue to see in 2026.

Peter: Maybe as we think about ’26, and LMEs are such a focus, I think one interesting thing and maybe this will come to fruition, maybe not, I have seen in more special sits, more tighter deals almost a complete LME blocker where you just stop that negotiation. You just stop negotiating the various sort of laundry list of LME protections. You almost just put a single covenant that says you can’t do LMEs.

Obviously the wording of that is, is important. But that’s one where I wonder if maybe to cut down on legal hours and just to get to the heart of it, where you see some adoption of just a universal LME blocker on maybe some middle market, lower middle market deals.

I don’t know about the upper middle market, where I think the term set is almost pretty well sort of negotiated and where you almost see changes of degrees vs a big sort of covenant like this. But that’s one in ’26, I wouldn’t be shocked if we see more of that just to cut down a lot on the whole whack-a-mole if you will of the various LME provisions.

You would just kind of put an override, obviously the language of that override is important and you don’t want to cut off legitimate business, operational flexibility. But that is something we’ve been seeing, more in the distressed world, that might have a place in the lower middle market world.

More so to cut down a lot of the legal back and forth, where a sponsor says ‘Look, I gave you the LME blocker, let’s move on right’. As opposed to now you’re negotiating potentially a bunch of different LME provisions ad hoc. In which case, while I bill by the hour and that might be helpful for some lawyers, it’s not necessarily helpful for driving efficient execution and getting your deals done on a cost-efficient basis.

Dan I wonder from your view as we head into ’26, which is hard to believe it’s already here give or take, what are your crystal ball predictions? What are you seeing?

Dan: Sure, I’m actually going to start with a question from the audience which I think tees this up well. We have a question as to whether we’re going to see a race to the bottom on terms to the syndicated market.

Peter talked to this a little bit at the outset but if you look back five years or so, the trend has certainly been a loosening of terms, incorporation of technology from the syndicated markets and that it gradually trickles down.

I think there’s been a bit of a pause on that in the last couple of months as terms have become seemingly aggressive enough for everyone’s taste. There’s always going to be haggling on baskets and things like that – and those will be loosened.

But in terms of core underwriting terms, on covenants, on EBITDA definitions, that all seems to have paused a little bit.

Over the long term I would expect that will continue. So we’ll see a continued deterioration of terms from a lender perspective. And certainly looser documentation I think.

There’s been a consolidation of the industry, certainly at the largest players at the top. But in the lower middle market and the core middle market, there’s still room for specialization of lending and specialization of lending groups.

And I think in those sort of transactions, the term creep is going to be mitigated because you are going to have speciality lenders lending into special – not industry target special situations – but lending into certain industries, or certain companies, certain sponsors and they’re going to maintain more term discipline.

On a macro level, private credit funds are holding the risk, hopefully to maturity and getting repaid. So underwriting is going to continue to be more disciplined and underwrite from a different perspective than it does in the syndicated market.

So over time a better business is going to get underwritten, with looser terms that will generally continue. But there is some natural limitation on that in the private credit market, at the upper end of the market.

To Peter’s last point, I think we’ll continue to see large cap deals, BSL replacement whatever we want to call them – essentially deals with EBITDA over $100 mn – that are going to look increasingly like broadly syndicated deals because that’s their competition.

It’s not lenders in the core middle market. It’s what going to clear a syndicated deal. And obviously there’s an inclination by some private equity sponsors to private credit because of the speed of execution, certainty of terms, the private nature of restructuring, the lack of news reporting on it generally.

So people will continue to use private credit and increased spreads but the terms are going to be played off each other increasingly in the coming year.

Peter: I also think people don’t necessarily appreciate that the syndicated terms have, as they have the same supply demand imbalances too, and have some of the same pressures we have in private credit. So the syndicated terms have also become more borrower favourable as well.

So I do think there’s still a healthy spread between BSL terms and private credit terms. It is just that that spread has still, on an absolute basis, moved more in the borrower’s favour over the last few years that what it was 10 years ago. Or pick your point in time.

One more question here. Just the thought of the US vs Europe, which has seen more borrower friendly terms. It’s a competition. If you’re a lender side person, maybe it’s not a good competition. But I do think that as private credit has naturally scaled and started to do bigger deals, you’re naturally starting to do cross border business.

You’re running into global sponsors that are doing both European deals, US deals. You’re running into counsel that are seeing both US and Europe. So I think you’re naturally seeing a lot of harmonization between the markets where, if you’re a private equity sponsor, and you just did a deal in the US last week and it was a widget company and it got this set of terms, and now you’re doing a widget company in Europe. What those terms are, your counsel knows what those terms are.

So I do think there’s a natural inclination to harmonize those markets. I do think there’s still some idiosyncratic – various terms are looser there. So it’s not necessarily apples to apples across every single term.

But that being said, there’s definitely a little bit of a coming together of some of the looser terms where I think historically Europe might have been a little tighter.

Sneha you’ve done a lot of work in the European market, what are you seeing there? What are your thoughts?

Sneha: I think one of the key distinction that we should keep in mind between US and European documentation – and things can continuously change right – the bulk of European credit agreements or loan agreements they do not contain an unrestricted sub.

So setting that out for everyone so that we understand that distinction in LMEs will be very different from that lens because they don’t have the designation capacity for most parts.

The other piece is that the European markets are growing – and they’re growing at a very steady pace. This year has particularly been very good on that side of the house. But at the same time I would say that even more than the US, the European market is a very small group of private credit lenders who can lender over there because there are currency issues that come into play, more operational style concerns.

And just as to how the fundraising has been, so that goes to it again, it is way stronger clubs, a smaller community that is looking at it. So there is much more harmony around that group that will continue to play out in those deals.

It’s not like we haven’t seen any, but at least on the private credit side, the documents are still in some parts much tighter than you see in the US market.

There is other stuff which is looser. You have a snooze and lose construct which exists in Europe and it exists in private credit deals. You don’t have some of that here.

So without getting too granular, I think that’s just keeping in mind that the LME lens has to be very different for the two markets – at least as to how the documentation stands today. It will be important as we continue to look at the European market and that growth story.

Peter: Sophie maybe check in with you are there any other questions?

Sophie: Yes one that I know we wanted to cover, to bring it to a very topical subject is the implications of First Brands and Tricolour. This has obviously been making a lot of headlines in the sector so I would love to get your take on the implications of that.

Peter: Jon Gray of Blackstone has actually put out some good videos on this. But it appears to us that some more of the asset-based revolving type, receivable lending, that sort of thing has somehow become a private credit issue. While it is never generally good for the markets to see large losses in a fixed income, loan sort of product, I think from what we are discovering, one, it looks like in both of these instances there’s a bunch of alleged fraud. And two they seem to be more bank deals and traditional sort of bank type borrowings.

So not withstanding that the press has picked up and sensationalized it, that this almost the canary in the coalmine. But I just don’t know and we aren’t really seeing it come up in any of our deals because I don’t know if there’s any real correlation between fraud in a receivable facility and a direct lending corporate deal in a predominantly sponsor-backed market.

So I think the short answer is that I don’t know if we see this mattering. Obviously it does put a spotlight on underwriting, it puts a spotlight on the auditors and just making sure that, to the extent there’s something that doesn’t smell right, it’s probably not right and to do your diligence.

That being said I do think our lenders are doing robust underwriting. They’re really kicking the tires. This is not a ‘Where do I send the signature pages? Where do I send the money?’ lender set that we work with.

So it’s unfortunate that these names have dominated the news cycle and somehow ported over to being a private credit issue. But from what we’re seeing it seems like a pretty contained, isolated set of fraudulent actors that have led to this.