Could See $3 Billion Unitranche By Year End: Churchill Asset Management's Schwimmer

The video discusses the stability and appeal of private credit, highlighting its lower correlation with overall market volatility. It explores leverage trends, particularly in large loans, and the potential for market growth. Concerns about covenant light deals and the importance of maintaining covenants for smaller companies are addressed. The video concludes with a focus on preferred sectors like healthcare, technology, and business services, which have shown resilience and growth potential.

What is one reason private credit is considered more stable than public markets?

• It has a secondary market.

• It is less correlated with overall market volatility.

• It is unsecured in the capital structure.

• It trades frequently.

How is leverage typically measured in private credit?

• Debt to assets

• Debt to EBITDA

• Debt to revenue

• Debt to equity

What is the expected trend for the size of private credit loans?

• They will increase, potentially reaching $3 billion.

• They will remain the same.

• They will decrease significantly.

• They will be capped at $2 billion.

What is a significant concern for credit firms when considering deals?

• High market volatility

• Low cash flow

• Lack of covenants

• High interest rates

What is a characteristic of covenant-light agreements?

• They are mandatory for all loans.

• They have fewer restrictions on borrowers.

• They are common in small middle market companies.

• They offer more protection to lenders.

Which sector is NOT mentioned as a favored area for private credit investment?

• Consumer goods

• Business services

• Technology

• Healthcare

Why do private credit firms prefer defensive industries?

• They require less capital.

• They are less affected by economic downturns.

• They have higher leverage.

• They are more profitable.