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Hedge Funds Credit Survey

Hedge Funds Credit Survey

Survey: Hedge Funds See Easing of Credit

Hedge funds and private equity firms have finally marked an easing of credit terms, according to a recent survey. Over the past three months, credit terms have relaxed but remain much tighter than around 2006 and earlier.
Although 65% of senior credit officers who were surveyed by the Federal Reserve said that price terms for credit to private investment firms remained unchanged, 25% said they had loosened somewhat.

For nonprice terms, such as haircuts, covenants and cross-default provisions, 35% said terms had loosened, while 55% said they remained basically unchanged and 10% said they had tightened those terms.

Still, comparing credit terms for private investment firms at the end of 2006 to today, fully 95% of credit officers said terms were considerably or somewhat tighter.

Also, looking forward for the next three months 25% of senior credit officers told the Fed they expected price and nonprice terms for credit to the private investment industry to tighten. Source

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