Middle-market corporations face elevated refinancing costs as fixed-rate debt issued during historic lows nears maturity. Financial institutions are demanding stricter leverage covenants and higher risk premiums across traditional lending channels.
Private Credit Fills Bank Lending Gap
With commercial banks tightening underwriting standards, private debt funds have captured 42% of middle-market refinancing deals this quarter. However, yield expectations hovering above 10% are compressing operating profit margins across manufacturing and retail sectors.