Not All Corporate Loans are Equal: Larger Companies have been Better Performers

The private credit market has experienced rapid growth in recent years, but investors should carefully consider the underlying loans in the portfolios they invest. As this chart illustrates, very small companies (<$10 Million EBITDA) have approximately 20 times the default rates of larger companies (>$100 Million EBITDA). Higher default rates negatively impact investment performance while lower default rates cushion investors from significant losses that may be experienced with large exposure to small company loans.

Source: Source: Original chart courtesy of BlackRock, 2024 Private Markets Outlook



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