Despite covenant-lite trend, lender protections are stronger in private credit than in BSL market – Proskauer – PitchBook

The Punchline

The article analyzes the trend of covenant-lite deals in private credit, revealing a significant increase from 4% in 2023 to 21% in 2025. Despite this trend, lender protections in the private credit market are reported to be stronger than those in the broader syndicated loan (BSL) market.

Why You Should Read This

It provides valuable insights into the evolving landscape of private credit and compares protections with traditional lending markets, which is crucial for making informed investment decisions.

Who This Is For

This article is aimed at institutional investors, private credit professionals, credit analysts, and fund managers who are interested in understanding the dynamics of covenant structures and lender protections in private credit markets.

Investor Implications

The findings suggest that while the prevalence of covenant-lite deals is rising, the strengthening of borrower protections in private credit may offer reassurance to investors. This could influence allocations towards private credit as a viable investment option amid a changing market landscape.