Europe’s private credit funds resort to bank borrowing, raising concerns over systemic risks; Global Corporate Defaults hit highest level since the GFC

This trend raises alarm about the broader risks from interlinked dependencies.

LONDON, March 14 (Reuters) – Europe’s private credit funds are increasingly borrowing from banks to boost their performance, fuelling concerns about the wider risks posed by this interconnectedness.
A record 80% of new European private credit funds borrowed from banks via ‘subscription lines’ in 2023, funding that allows them to lend before tapping their investors for cash, MSCI Private Capital Solutions research shared with Reuters shows.

www.reuters.com/business/finance/private-credit-ties-banks-deepen-europe-default-risk-rises-2024-03-14/

Meanwhile…

JUST IN 🚨: Global Corporate Defaults hit highest level since the Global Financial Crisis pic.twitter.com/gWEkqt6ys1

— Barchart (@Barchart) March 14, 2024

www.ft.com/content/f811649b-f66d-43aa-8a66-2412a4f0be50