The median debt percentage for middle-market deals continues to rise. Lenders are loosening their purse strings, as the market continues to recover and loan default rates remain low versus historical standards. This is one of the dynamics pushing middle-market valuations higher and making for a seller’s market in most industries. Determining how long this trend will last is a bit of guessing game. I won’t attempt to predict when interest rates will rise and/or the economy will sputter, but I’ll take the high-odds bet that the when that happens the chart below will stop moving up and to the right, as will valuations.
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