(Bloomberg) -- Alacrity Solutions has entered into restructuring talks with its private credit lenders less than two years after the insurance claims manager was acquired by BlackRock Inc., according to people with knowledge of the matter. This marks the latest large restructuring to come to light in the private credit world this year, as companies continue to grapple with higher rates and private credit managers struggle to stay ahead of potential losses.
Pluralsight Inc. restructured earlier this year and lenders took the keys to the business. Some market participants have warned of increased stress, as interest-rate relief keeps being pushed back.
Defaults have remained low in the private markets, partially due to “kicking the can down the road between borrower and lender,” Co-Deputy Managing Partner of Davidson Kempner Capital Management Patrick Dennis said. Private lenders are often able to stay ahead of restructurings and defaults by quietly amending loans and finding other solutions. However, even those back-door strategies have been put to the test in recent months.
A report by JPMorgan Chase & Co. analysts on Oct. 8 tried to shed some light on distress in private credit, which is by its very nature an opaque industry.
Their research showed that non-accruals in private credit have been rising since late-2022 but remain below levels hit during the pandemic and align with trends in the leveraged loan market. Combining non-accruals with defaults logged by the KBRA DL.
