ING Says Private Credit, Iran War Risk Fueling Funding Cost Jump

Companies are facing the risk of “materially more expensive” funding from stresses tied to private credit’s concentrated exposure to the software sector and renewed inflation pressure from the Iran war, according to ING Groep NV.

“In any plausible scenario, even one less adverse than the central case, redemption pressure across private credit vehicles is likely to continue, slowing the pace of new financing,” ING credit strategists Timothy Rahill and Jeroen van den Broek wrote in a Wednesday report.

Private credit stresses “could trigger a broader repricing across leveraged loans, high yield and ultimately investment grade credit as contagion spreads,” ...