Mid-market enterprises face heightened debt servicing costs as maturity walls force refinancing at interest rates significantly above previous issuance benchmarks.
Private Credit Expansion
With commercial banks tightening lending standards to preserve liquidity, private credit funds have absorbed a growing share of corporate debt refinancing. Direct lenders are structuring deals with higher debt-service coverage requirements and stricter financial covenants to mitigate default risks.
M&A Activity Impact
High borrowing costs have curbed leveraged buyout volume, shifting private equity activity toward add-on acquisitions and minority stake investments. Private credit platforms are increasingly taking equity co-investment positions in deals to supplement yield returns.