Creditor Corner
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Your weekly curated content from the Creditor Rights Coalition
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?In this Week's Creditor Corner
Private credit cracks widen, LMEs on repeat, Knicks fans look to cash out, Thoma Bravo loses the keys, Thames Water goes political, and much, much more...
Featured Content
Bruce Richards on the Markets
The Dots are Dead, Long Live the Dots
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Tweet of the week
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The Private Credit Bill Is Coming Due
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Our Take:
Private credit's stress metrics are moving in one direction. Nonaccruals jumped 40% sequentially in Q1 to nearly $10 billion - and that's the number managers are reporting. Octus' cross-BDC analysis puts the adjusted figure at $16 billion, a 61% gap that reflects issuers varied reporting methods.
?When the reported rate is 2.01% and the adjusted rate is 3.24%, the question worth asking is how much of private credit's pristine track record is a function of performance versus the flexibility managers have in marking their own books. With redemption requests at a median 9.4% in Q2 (see below), with high-profile redemptions hitting 40.7% for the Blue Owl Technology fund, investors appear to be asking the same question.
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In the news
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Redemption Pressure Continues to Mount
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From Sponsor to Spectator...
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Our Take:
Sponsors kept busted LBOs alive for years through the amend, extend and pretend playbook... until now. This week, the music finally stopped. Thoma Bravo handed the keys to creditors, reportedly taking a $5 billion loss in the process.
Now comes the harder part. The private credit funds that underwrote the deal don't just hold the loans—they own the company. The same firms that marketed disciplined underwriting must now prove they can operate a software business, not simply finance one.
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Knicks win a windfall for distressed investors
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Exclusive Content
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Extend, Pretend, Repeat
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Our Take:
May's LMEs were notably well-behaved - no drop-downs, no uptiers, no double-dips. Just consensual extensions and pre-wired handover-the-keys provisions. Progress, perhaps. But four of seven completed deals involved companies returning to the restructuring table after a prior LME or bankruptcy, some within two to three years. When 57% of your "solutions" require a sequel, it raises a fair question about whether LMEs are fixing capital structures or just deferring the reckoning.
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The more telling development is what lenders are demanding in return. Tighter docs with explicit anti-LME blockers and pre-baked equitization triggers suggest the creditor community is done being surprised by round two. The message embedded in deals like Optiv and RealTruck is pointed: we'll extend, but if you come back, we own you.
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Featured Content
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Mind the Gap: Chapter 11’s English Exit
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Our take:
A must-read primer on how UK restructurings are starting to steal the thunder away from US Courts as the forum of choice for large corporate restructurings. With fewer protections for minority creditors and greater leverage for out-of-the-money equity, the UK scheme prioritizes speed and flexibility but at what cost to established rule of the road?
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The Populist Band-Aid for a £16bn Problem
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Featured Content
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The Dots are Dead, Long Live the Dots
Chairman Kevin Warsh's first Fed meeting offered an early glimpse of what will likely become a very different communications regime at the Federal Reserve. Markets viewed his comments as bearish, which I believe was misinterpreted since I don't expect the Fed to raise rates in 2026, however, the new Fed Chair appears to be at odds with the dots (the other Fed voting members). The dots are bearish, as they shifted higher; shown in the chart below.
Warsh has long been skeptical of excessive Fed transparency and forward guidance. Consistent with that view, he delivered a terse statement, took questions, and signaled a preference for letting markets focus more on incoming data and less on Fed forecasts. He also declined to submit his own rate projection at his first meeting, while simultaneously launching a review of Fed communications and signaling reduced reliance on forward guidance.
Yet the Fed still published the dot plot; however, Chairman Warsh declined to submit his dot.
The dots, first introduced in 2012 under Bernanke, were designed to give markets greater visibility into policymakers' thinking. Critics argue they create a false sense of precision and encourage investors to trade forecasts rather than facts. Supporters counter that they provide valuable insight into the range of views inside the FOMC.
The contradiction is striking. Our new Fed Chair is intent on reducing the Fed's reliance on forecasts and presides over an institution that continues to publish one of the most closely watched forecasting tools in global finance.
My expectation is that, over time, Warsh will ultimately kill the dots as it is hard to reconcile his intent to be less predictive, less prescriptive, and more data dependent.
For now, the dots remain alive and well.
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To follow Bruce's thoughts on the markets, investing and more, follow
@bruce_markets
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Data Download
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Tale of Two Cities
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Our take:
As sponsors have increasingly migrated to the leveraged loan market, one of the more underappreciated developments has been the meaningful improvement in the quality of the high yield bond market. Today's high yield universe has a significantly greater concentration of higher-quality BB-rated issuers and substantially less exposure to software companies than the leveraged loan market.
With stronger call protection, greater convexity, and a higher-quality issuer base, the high yield bond market may be the place to go for compelling risk-adjusted returns.
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Podcast of the Week:
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Navigating the AI Threat to Software Credit
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European Special Situations Outlook
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June 24, 2026
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9fin Breakfast Discussion: The Delayed Default Wave and What Comes Next
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June 24, 2026
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 A Discussion with New York's Bankruptcy Judges: Current Issues and Trends
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June 25, 2026
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TMA NYC Joint Pop Up Happy Hour
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June 30, 2026
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Fitch Ratings & REDD Intelligence: Panel Discussion on Latin America Sovereign and Corporate Credit
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July 15, 2026
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The Data Download
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Bringing Transparency to the Bankruptcy Process
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Our Take:
The Daily Cost of BK Legal fees Are Increasing.
Are we shocked? No.
We took a deep dive to see what is driving up the daily cost of restructurings and the culprit: Increasing Legal Hourly Rates. We analyzed final fee apps for top debtor law firms from 2018 to 2024 and found average hourly legal fees have increased by over 65% since 2018. Maybe a little bit of sunlight is the right disinfectant to help remedy the problem....
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