Aug 5 (Reuters) - The Dallas and New York Federal Reserve banks plan to launch a pilot survey into the estimated $1.3 trillion private credit market after the end of the third quarter, the New York Fed said in a statement on Wednesday.
Private credit's expansion began as a means of funding private equity groups' buyouts after the 2008 financial crisis saw bank financing dry up. It then swelled into a prime source of debt financing for riskier businesses, drawing in capital from income-hungry investors.
Though still tiny compared with the traditional banking industry, the sector has been dogged by concerns over the quality of lending standards and a lack of transparency.
The survey would segment the market into three sections based on borrower size: an upper middle market with more than $100 million in earnings before interest, taxes, depreciation and amortization; a middle market between $30 million and $100 million EBITDA; and a lower middle market with less than $30 million EBITDA, the statement said.
Findings of the survey are expected to be published in the first quarter of 2027, it said.
#statement
Private credit's expansion began as a means of funding private equity groups' buyouts after the 2008 financial crisis saw bank financing dry up. It then swelled into a prime source of debt financing for riskier businesses, drawing in capital from income-hungry investors.
Though still tiny compared with the traditional banking industry, the sector has been dogged by concerns over the quality of lending standards and a lack of transparency.
The survey would segment the market into three sections based on borrower size: an upper middle market with more than $100 million in earnings before interest, taxes, depreciation and amortization; a middle market between $30 million and $100 million EBITDA; and a lower middle market with less than $30 million EBITDA, the statement said.
Findings of the survey are expected to be published in the first quarter of 2027, it said.
#statement
2 days ago
