Middle market

The Georgia runoffs and resulting balance of power in Congress will help determine which bills on bankers’ wish list gain traction. But regardless, existing coronavirus relief such as the Paycheck Protection Program and a push for more economic aid will remain top of mind for lawmakers and the industry.

KKR & Co. is looking to grow its asset-based private lending business to capitalize on a retreat by banks and more traditional market participants in the wake of the coronavirus pandemic that has led to mis-priced risk.

The transaction is the first in two years for MidCap, which provides startup and expansion financing for biosciences/healthcare and technology firms backed by VC and private equity.

The new $1.2 billion InSolve Global Credit Fund IV will pursue a subset of the alternative asset manager’s specialty in non-performing distressed loans, including those in insolvency, restructuring or liquidation, according to a company release.

The firm will offload parts of its business including its business development company, Garrison Capital Inc., and other credit vehicles.

Fitch Ratings is evaluating all 59 middle-market collateralized loan obligations it rates for potential downgrades, over concerns of the ability of small-business borrowers to support loan payments under COVID-19 stresses.

Business development companies (BDCs) were trending ever healthier prior to the pandemic, but if the economy remains in the deep doldrums it may ultimately be their affiliated asset-management companies that investors should look to for assurance.

Because of debt restrictions in Main Street lending programs, many speculative-grade borrowers appear ineligible for federal loans to alleviate COVID-19 stresses, according to a new report from Fitch Ratings.

Small and mid-sized companies are facing higher borrowing costs as private lenders grow more cautious about lending to beaten-up businesses

The Fed has tweaked its Main Street Lending Program to stir more enthusiasm, including the creation of a third financing option for larger companies. Will it make a difference?

Instead of just seeking out distressed situations, the Dislocation Opportunities Fund has a wide mandate to buy corporate and asset-backed debt.

The fund will be similar to the first iteration, which gathered $2.4 billion last year and focused on lending to family- and entrepreneur-owned businesses.

Analysts and ratings companies are sounding alarms as a number of BDCs rush to shore up finances, or throw lifelines to their heavily indebted borrowers.

Direct lenders around the world are talking with borrowers about easing interest payments, waiving penalties and relaxing covenants as they assess the growing damage to their portfolios caused by the coronavirus pandemic.

Asset manager PGIM Inc. is looking to at least triple its investments in the growing direct lending market where it wants to compete with banks to fund mid-size companies outside of the buyout space.

The state retirement system is looking to dedicate one of every six dollars it manages to direct lending - more than five times the industry average.

Family offices—mini-investment firms set up by the super rich to manage their personal wealth—have poured more and more cash into direct lending, Preqin says.

First Eagle, with $99 billion AUM, will expand its presence in structured finance-based direct lending to middle-market firms through the acquisition by uniting the two firms’ credit-business platforms, according to a release.

The month of October brought some jumbo unitranche loans to the direct lending market. It also brought declines in the quality and terms of broader deals, according to some participants.

According to Kroll, this is the middle-market lender's first securitization of growth-opportunity loans made to venture-capitalized software firms that have yet to develop earnings or substantial assets.