Conditions in the private capital markets remain incredibly robust, building on the favorable tailwinds seen so
far in 2021. Investors are flush with liquidity, driven by the increasing magnitude of the non bank direct lending community ($900+ billion), a healthy commercial banking system, increasingly stronger macroeconomic trends, and continued decreases in leveraged loan default rates. Eager to put cash to work, the market is seeing increased receptivity to tighter pricing, higher leverage multiples, credit given to more generous adjustments to EBITDA, and looser covenant packages. The search for yield continues to provide a tailwind for the asset class.
In this Private Capital Markets Update, we look at Recapitalization and M&A Activity, Minimum Equity Contribution, Leverage Levels, and more.