Private Credit Survey FAQs

In August, the Federal Reserve Banks of Dallas and New York announced the forthcoming launch of a pilot survey exploring trends in the U.S. private credit direct lending market. These frequently asked questions provide additional information about the scope and content of the survey, and what is expected of respondents.

Given the growth of private credit and limited visibility into new private credit lending activity, this survey will provide insight into the availability of credit, credit provision, the evolution of lending standards in private credit markets, and the implications of these factors for the broader economy.

Following the publication of the pilot survey results, the Federal Reserve Banks of Dallas and New York expect to launch a quarterly survey to gather similar data over time.

Participation in the survey is fully voluntary. The survey is expected to include questions on directional trends of credit provision, not specific quantities. If a regular survey is launched after this pilot, it would seek consistent participation on a quarterly basis from firms that are active direct lenders.

No. The survey is not intended to identify risks at private lenders, or to inform Federal Reserve supervisory or regulatory activities. Rather, the survey will focus on trends in credit provision and credit quality in private direct lending, to allow for a better understanding of the implications for the broader economy. Micro data and firm-specific responses will not be shared with Federal Reserve Supervision or with other regulatory agencies.

Survey responses will only be provided in the aggregate. No information directly attributable to a specific firm will be published.

Participants’ names, firm affiliations, and individual responses will be kept confidential. Open-ended responses may be published anonymously, but only with a participating firm’s consent. No third parties will be involved in administering the survey, or in reviewing any identifiable survey results. Only limited personnel at the Dallas Fed and New York Fed will see information about the participants or the micro survey results.

Survey questions are expected to ask respondents to characterize their direct lending activity, different aspects of origination, observed demand for credit, and more.

The first set of questions will ask for respondents' assets under management dedicated to private credit direct lending as described further in the participant criteria, the total dollar value of respondents' new loan and refinance commitments over the past quarter, and whether respondents are active in lending to at least one of three segments:

• Small (less than $30 million in annual EBITDA)
• Medium ($30-100 million in annual EBITDA)
• Large (more than $100 million in annual EBITDA)

The next set of questions will ask how firms' overall credit standards for making new direct loans have changed in order to explore the trends and drivers of credit provision. To understand opinions on the economic outlook, the survey will ask how firms ' expectations for conditions affecting portfolio companies have changed. To understand changes in demand for credit, the survey will ask the extent to which inquiries from potential borrowers have changed over the past quarter. For respondents that are active in multiple segments, questions will be differentiated by segment when appropriate.

1. Over the past three months, how have your firm's overall credit standards for making new direct loans changed (broadly capturing credit spreads, leverage, documentation standards)?
• Tightened considerably
• Tightened somewhat
• Remained basically unchanged
• Eased somewhat
• Eased considerably
2. For applications for loans or credit lines that your firm has approved, how have the terms of those loans changed over the past three months? (Responses will be on the same qualitative scale ranging from “tightened considerably” to “eased considerably”.)
• Credit spreads of loans (wider=tightened, narrower=eased)
• Financial covenants
• Loan documentation standards (non-financial covenants)
• Level of subordination (equity and subordinated debt cushions)
• Inclusion and terms of payment in kind toggles
• Offerings of other supplementary credit lines (delayed drawn term loans, revolving lines of credit)
• Lending commitment sizes
3. If credit standards for making new loans or credit lines have changed over the past three months, how important are the following reasons for the change? (Responses will be on a qualitative scale: “not important”, “somewhat important”, “very important”.)
• Economic outlook
• Risk tolerance
• Available dry powder to deploy
• Financing terms from banks and non-banks on borrowings
• Competition from other lenders
• Performance of existing portfolio
• Lending standards in public credit markets
4. How has the outlook for your portfolio companies evolved over the past three months? (Responses will be on a qualitative scale: “improved substantially”, “improved moderately”, “stayed about the same”, “declined moderately”, “declined substantially”.)
5. At your firm, apart from normal seasonal variation, how has the number of inquiries from potential borrowers changed over the past three months? Please consider only inquiries for additional or increased lines as opposed to the refinancing of existing loans. (Responses will be on a qualitative scale: “improved substantially”, “improved moderately”, “stayed about the same”, “declined moderately”, “declined substantially”.)

The final question will give respondents the opportunity to provide any additional comments. Firms that choose to provide comments can opt to allow anonymous publication of them at time of submission.