
As the private credit market grows will the risks increase?
The Flip Side
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The Growth of Private Credit Is a Big Draw, Jeff.
Private credit is really in the form of loans. They're all floating rate. That means as the Fed starts hiking interest rates, the interest payments that these companies owe are going to go up. Even at seven to eight times leverage, these companies generated cash to pay down debt because rates were so low. But clearly, higher interest bills are going to start eating into free cash flow.
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