Private Credit Veteran Warns 'A Canary in the Coal Mine Is Coming' as $1.8 Trillion Market Cracks

Corporate Action Impact 4
โดย Yahoo Finance·Read original
Summary · why it matters

Morgan Stanley capped withdrawals at 5% from its $7 billion private credit fund and Apollo Global Management again limited redemptions from its largest non-traded retail private credit fund, as withdrawal requests spiked across the $1.8 trillion private credit market this quarter. Len Tannenbaum, founder of Tannenbaum Capital Group, warns that business development company managers are marking private loans at 70 to 90 cents on the dollar, prices he doubts would survive actual market discovery. He points to a wave of direct loans originated in 2021 and 2022 that now face refinancing at much higher rates, with troubled software loans being converted into payment-in-kind securities and non-accruals creeping up. Tannenbaum is launching a new BDC targeting lower-middle-market companies with EBITDA of $5 million to $25 million, calling the next two years a great vintage because new capital can be deployed on tougher terms against companies that have survived the rate reset.

Impact on stocks 3

Aging Population▼ · 1 stocks
Apollo Global Management LLC Class A
APO
▼ NegativeCapitalrelevance

Apollo again limited redemptions from its largest non-traded retail private credit fund, signaling stress in its private credit business.

Financials▼ · 1 stocks
Morgan Stanley
MS
▼ NegativeCapitalrelevance

Morgan Stanley capped withdrawals at 5% from its $7 billion private credit fund, indicating liquidity issues in its private credit operations.

Artificial Intelligence▲ · 1 stocks

Off-coverage companies 1

Tannenbaum Capital GroupPrivate▲ Positive
Capitalrelevance

Tannenbaum Capital Group founder warns of market cracks and is launching a new BDC, positioning to deploy capital on tougher terms in a favorable vintage.

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