Why Nobody Defaults Anymore (w/ Kenny Tang, PitchBook)
Devin Mathews interviews Kenny Tang, Head of U.S. Credit Research at PitchBook, exploring the structural mechanics, evolution, and emerging stress points across the private debt and broadly syndicated loan markets. They break down essential credit concepts including cov-lite structures, PIK interest, and liability management transactions while analyzing why headline default rates remain below 1% despite severe price discounts and mounting portfolio stress. Tang outlines the impact of the 2026 AI software shock, the rise of out-of-court restructurings, and what credit LPs must scrutinize in underlying borrower financials.
- Enterprise software debt was historically treated as top-tier collateral because sponsors could quickly slash SG&A and R&D budgets to cover debt service during downturns. Read →
- Roughly 92% of broadly syndicated loans now lack financial maintenance covenants, stripping lenders of early intervention rights when borrower performance degrades. Read →
- The headline default rate in the broadly syndicated loan market sits at just 0.87%, masking widespread balance sheet distress. Read →