SS&C says private credit still has room to grow, but underwriting discipline faces rising scrutiny
SSNC•SS&C says private credit accounts for about 10% of global corporate lending exposure and could grow further. Its analysis flags borrower-friendly terms, rising PIK use and liquidity promises in evergreen funds as areas warranting scrutiny.
1. Growth and underwriting
SS&C’s analysis says private credit has room to grow, while noting the sector has not faced a major economic downturn that would test underwriting discipline. It says rising competition is bringing more borrower-friendly loan documentation, making covenant strength as important as yield for limited partners.
2. Risks to monitor
The analysis identifies increased payment-in-kind (PIK) use as a potential early warning of borrower stress before defaults appear in headline metrics. It also cautions that liquidity promises from expanding evergreen structures must match the underlying illiquid loan assets.
