Smaller Private Credit Borrowers Drowning as Rates Stay High

Inflation and high interest rates have continued to take their toll on a swath of private companies that have seen their profits shrink and debt costs soar, according to a new report that warns they could compromise the broader economic momentum.

The average middle-market private company, those valued between $100 million and $750 million based on sales revenue, is near violating or already has breached covenants and is struggling to service debt, the report by Marblegate Asset Management and RapidRatings found.

“Where we are on interest coverage ratios, the ability to service debt and to generate cash — it’s astonishing,” ...