Dallas and New York Fed banks to pilot survey of private credit market

• The Dallas and New York Federal Reserve banks are launching a pilot survey of the private credit market.
• The private credit market is estimated to be worth $1.3 trillion.
• The survey will segment borrowers based on EBITDA into upper middle market, middle market, and lower middle market.
• The findings are expected to be published in the first quarter of 2027.
• Regulators have faced challenges in assessing the risks of private credit due to a lack of data.

The Dallas and New York Federal Reserve banks are set to launch a pilot survey of the private credit market, an estimated $1.3 trillion sector, following the end of the third quarter. This initiative comes amid regulatory challenges in assessing the potential risks posed by private credit due to a lack of transparency and data.

The private credit market has grown significantly since the 2008 financial crisis, becoming a key source of debt financing for businesses, particularly those considered riskier. However, concerns persist regarding lending standards and transparency within the sector.

The survey will categorize borrowers into three segments based on their earnings before interest, taxes, depreciation, and amortization (EBITDA): the upper middle market (over $100 million), the middle market ($30 million to $100 million), and the lower middle market (under $30 million).

Results from the survey are anticipated to be released in the first quarter of 2027. The New York Fed stated that the survey aims to provide crucial insights into credit availability, evolving lending standards, and the broader economic and monetary policy implications of the private credit market's growth.