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Private Credit Market Strains: Risky Terms Surge Amid Growth

11/21/2025

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Summary

Story summary

The private credit market shows strain as riskier terms rise, with payments-in-kind (PIKs) classified as 'bad' at 57% in Q3 2025, up from 36.7% in Q4 2021, per Lincoln International.
Nevertheless, 68% of companies in Lincoln International's database reported revenue growth, suggesting the market is not in crisis.
Experts warn that rising private credit spreads and higher leverage could create future risks.

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Story summary

The private credit market shows strain as riskier terms rise, with payments-in-kind (PIKs) classified as 'bad' at 57% in Q3 2025, up from 36.7% in Q4 2021, per Lincoln International.
Nevertheless, 68% of companies in Lincoln International's database reported revenue growth, suggesting the market is not in crisis.
Experts warn that rising private credit spreads and higher leverage could create future risks.