The borrower’s market revealed

Loan terms and covenants have weakened during 2018, making it a good time to borrow.

Private credit borrowers are in a strong position in 2018, according to survey data collected by the Alternative Credit Council and Dechert.

A study of loan terms found that arrangement fees are decreasing, with approximately four times as many lenders reporting their fees have fallen compared to those who have seen them increase.

Twice as many are reporting weaker financial covenant protection compared to those who are strengthening covenants, supporting claims that the industry is moving towards a “covenant lite” model.