Private Credit Eyeing Rescue Financing and Seeing Stress Signs

Private credit lenders are preparing for the next phase of the credit cycle: distress.

TCW Group Inc. is deploying record amounts of capital to rescue finance, in response to the fact that private markets are starting to see signs of stress, according to Chief Executive Officer Katie Koch.

There are signs of “excess,” Koch said during a panel at the Bloomberg Invest conference on Tuesday, or clues that distress is inching into the market. While defaults in private credit haven’t markedly risen, signals of stress, such as lenders offering extensions to maturing loans, are appearing, and are new territory ...