Medallia's Challenges Pose Risks for Private Credit, Affecting Blackstone and Thoma Bravo.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Should l Buy BXSL?
Source: Barron's
- Medallia's Market Position: Medallia is identified as a significant issue within the private credit markets, highlighting its challenges and vulnerabilities.
- Exposure of Firms: Two firms are noted to have the most exposure to Medallia, indicating potential risks for their financial stability.
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Analyst Views on BXSL
Wall Street analysts forecast BXSL stock price to rise
7 Analyst Rating
4 Buy
3 Hold
0 Sell
Moderate Buy
Current: 23.510
Low
27.00
Averages
31.67
High
35.00
Current: 23.510
Low
27.00
Averages
31.67
High
35.00
About BXSL
Blackstone Secured Lending Fund is an externally managed, non-diversified, closed-end management investment company. The Company’s investment objectives are to generate current income and, to a lesser extent, long-term capital appreciation. It invests at least 80% of its total assets in secured debt investments. The Company seeks to achieve its investment objectives primarily through originated loans and other securities, including syndicated loans, of private U.S. companies, typically in the form of first lien senior secured and unitranche loans (including first out/last out loans), and to a lesser extent, second lien, third lien, unsecured and subordinated loans and other debt and equity securities. It invests across various sectors, which include aerospace and defense, air freight and logistics, building products, commercial services and supplies, healthcare providers and services and others. The Company is externally managed by Blackstone Credit BDC Advisors LLC.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Medallia's Challenges Pose Risks for Private Credit, Affecting Blackstone and Thoma Bravo.
- Medallia's Market Position: Medallia is identified as a significant issue within the private credit markets, highlighting its challenges and vulnerabilities.
- Exposure of Firms: Two firms are noted to have the most exposure to Medallia, indicating potential risks for their financial stability.
See More
Wall Street Banks Eye Market Share from Private Credit Lenders
- Market Share Recovery: According to PitchBook data, banks' share of buyout financings over $1 billion fell to 39% in 2023 but has since rebounded to over 50% in 2025, indicating potential for banks to regain ground in the private credit market.
- Regulatory Environment Improvement: With expectations of easing regulations, particularly regarding the Basel III Endgame implementation, banks are poised to regain competitive advantages in the lending market, potentially attracting more business lending and increasing market share.
- Challenges for Private Credit: The private credit sector is facing intensified pressures as higher interest rates make it difficult for borrowers to repay loans, increasing default risks, while rising investor demand for liquidity may impact capital inflows into private credit.
- Signals from Large Transactions: Recent active participation of banks in large financing deals, such as multi-billion-dollar leveraged loans for Electronic Arts and Sealed Air, indicates a strong willingness to engage in significant transactions when market conditions permit, potentially enhancing competition in the market.
See More
Private Credit Markets Face Liquidity Test Amid Rising Defaults
- Liquidity Pressure Intensifies: Ares Management has capped investor redemptions in its $10.7 billion private credit fund at 5% after withdrawal requests surged to 11.6%, reflecting growing concerns over credit quality that could further undermine investor confidence in the sector.
- Default Rate Warning: Morgan Stanley warns that default rates in private credit direct lending could spike to 8%, significantly above the historical average of 2-2.5%, which would have a major impact on sectors heavily reliant on high leverage, particularly in software.
- Market Reset Signal: While rising default rates may cause pain for some funds, industry experts believe this could lead to better underwriting practices and more realistic valuations, ultimately freeing up capital for stronger businesses and promoting a healthy reset in the market.
- Concentrated Risk Areas: The software sector accounts for approximately 26% of direct lending, and as fears of AI disruption grow, attention has shifted to this area, with some smaller issuers experiencing default rates as high as 10.9%, highlighting the vulnerability of highly leveraged borrowers.
See More
Apollo Limits Withdrawals from Private Credit Fund: The Rush for Exits Explained.
- Private Debt Fund Limitation: The Apollo Debt Solutions fund, valued at $25 billion, has recently imposed restrictions on redemptions for its wealthy investors.
- Market Impact: This move reflects broader trends in the private debt market, where funds are increasingly limiting investor withdrawals amid economic uncertainties.
- Investor Response: Wealthy investors may face challenges in accessing their capital due to these new redemption limits.
- Industry Trends: The decision by Apollo highlights a growing caution among private debt funds in managing liquidity and investor expectations.
See More
Private Credit Market Faces Challenges Amid Concerns
- Market Pressure Analysis: While there are pockets of weakness in the private credit market, financial advisor Crystal Cox asserts that the warnings of a widespread crisis are overstated, indicating that current pressures stem more from market maturation than systemic risks, suggesting investors should remain cautious but not panic.
- Portfolio Recommendations: Cox advises individual investors to limit their exposure to private credit to about 5% of their overall portfolio, allowing them to enjoy higher returns while mitigating concentrated credit and liquidity risks, reflecting a strong emphasis on risk management.
- Rising Default Rate Expectations: Research from Morgan Stanley predicts that default rates in direct lending will rise from 5.6% to 8%, primarily driven by the impact of artificial intelligence on the software sector, indicating that risks are intensifying in certain areas and investors need to stay alert to industry dynamics.
- Liquidity Issues: Due to high redemption requests, some semi-liquid funds are facing challenges, and while overall private credit still offers higher yields than public debt markets, the yield gap has halved, demonstrating how changing market conditions are affecting investors.
See More
Private Credit Market Faces Growing Liquidity Crisis
- Surge in Redemption Requests: Recent redemption requests in private credit have surged to 14%, prompting Cliffwater to limit withdrawals from its flagship Cliffwater Corporate Lending Fund, indicating a strong demand for liquidity that could lead to a broader liquidity crisis.
- Active Secondary Market: Saba Capital, in collaboration with Cox Capital Partners, is launching tender offers to buy 6.9% of shares in Blue Owl Capital Corporation II at $3.80 per share in cash, highlighting the secondary market as a crucial avenue for investors seeking liquidity, although concerns remain about the market's capacity to handle large-scale redemptions.
- Necessity of Liquidity Restrictions: Chris Kotowski from Oppenheimer emphasizes that liquidity limitations in private credit funds are designed to achieve total return over time, and despite the market's lack of understanding of these structures, historically, these firms have shown resilience during downturns, indicating their strength.
- Rising Default Rate Risks: Industry experts warn that default rates in private credit could double in the coming years, with Morgan Stanley analysts suggesting defaults may reach 8%, reflecting growing concerns over loan quality, particularly as AI disrupts software companies.
See More
Medallia's Challenges Pose Risks for Private Credit, Affecting Blackstone and Thoma Bravo.
- Medallia's Market Position: Medallia is identified as a significant issue within the private credit markets, highlighting its challenges and vulnerabilities.
- Exposure of Firms: Two firms are noted to have the most exposure to Medallia, indicating potential risks for their financial stability.
See More
Wall Street Banks Eye Market Share from Private Credit Lenders
- Market Share Recovery: According to PitchBook data, banks' share of buyout financings over $1 billion fell to 39% in 2023 but has since rebounded to over 50% in 2025, indicating potential for banks to regain ground in the private credit market.
- Regulatory Environment Improvement: With expectations of easing regulations, particularly regarding the Basel III Endgame implementation, banks are poised to regain competitive advantages in the lending market, potentially attracting more business lending and increasing market share.
- Challenges for Private Credit: The private credit sector is facing intensified pressures as higher interest rates make it difficult for borrowers to repay loans, increasing default risks, while rising investor demand for liquidity may impact capital inflows into private credit.
- Signals from Large Transactions: Recent active participation of banks in large financing deals, such as multi-billion-dollar leveraged loans for Electronic Arts and Sealed Air, indicates a strong willingness to engage in significant transactions when market conditions permit, potentially enhancing competition in the market.
See More
Private Credit Markets Face Liquidity Test Amid Rising Defaults
- Liquidity Pressure Intensifies: Ares Management has capped investor redemptions in its $10.7 billion private credit fund at 5% after withdrawal requests surged to 11.6%, reflecting growing concerns over credit quality that could further undermine investor confidence in the sector.
- Default Rate Warning: Morgan Stanley warns that default rates in private credit direct lending could spike to 8%, significantly above the historical average of 2-2.5%, which would have a major impact on sectors heavily reliant on high leverage, particularly in software.
- Market Reset Signal: While rising default rates may cause pain for some funds, industry experts believe this could lead to better underwriting practices and more realistic valuations, ultimately freeing up capital for stronger businesses and promoting a healthy reset in the market.
- Concentrated Risk Areas: The software sector accounts for approximately 26% of direct lending, and as fears of AI disruption grow, attention has shifted to this area, with some smaller issuers experiencing default rates as high as 10.9%, highlighting the vulnerability of highly leveraged borrowers.
See More
Apollo Limits Withdrawals from Private Credit Fund: The Rush for Exits Explained.
- Private Debt Fund Limitation: The Apollo Debt Solutions fund, valued at $25 billion, has recently imposed restrictions on redemptions for its wealthy investors.
- Market Impact: This move reflects broader trends in the private debt market, where funds are increasingly limiting investor withdrawals amid economic uncertainties.
- Investor Response: Wealthy investors may face challenges in accessing their capital due to these new redemption limits.
- Industry Trends: The decision by Apollo highlights a growing caution among private debt funds in managing liquidity and investor expectations.
See More
Private Credit Market Faces Challenges Amid Concerns
- Market Pressure Analysis: While there are pockets of weakness in the private credit market, financial advisor Crystal Cox asserts that the warnings of a widespread crisis are overstated, indicating that current pressures stem more from market maturation than systemic risks, suggesting investors should remain cautious but not panic.
- Portfolio Recommendations: Cox advises individual investors to limit their exposure to private credit to about 5% of their overall portfolio, allowing them to enjoy higher returns while mitigating concentrated credit and liquidity risks, reflecting a strong emphasis on risk management.
- Rising Default Rate Expectations: Research from Morgan Stanley predicts that default rates in direct lending will rise from 5.6% to 8%, primarily driven by the impact of artificial intelligence on the software sector, indicating that risks are intensifying in certain areas and investors need to stay alert to industry dynamics.
- Liquidity Issues: Due to high redemption requests, some semi-liquid funds are facing challenges, and while overall private credit still offers higher yields than public debt markets, the yield gap has halved, demonstrating how changing market conditions are affecting investors.
See More
Private Credit Market Faces Growing Liquidity Crisis
- Surge in Redemption Requests: Recent redemption requests in private credit have surged to 14%, prompting Cliffwater to limit withdrawals from its flagship Cliffwater Corporate Lending Fund, indicating a strong demand for liquidity that could lead to a broader liquidity crisis.
- Active Secondary Market: Saba Capital, in collaboration with Cox Capital Partners, is launching tender offers to buy 6.9% of shares in Blue Owl Capital Corporation II at $3.80 per share in cash, highlighting the secondary market as a crucial avenue for investors seeking liquidity, although concerns remain about the market's capacity to handle large-scale redemptions.
- Necessity of Liquidity Restrictions: Chris Kotowski from Oppenheimer emphasizes that liquidity limitations in private credit funds are designed to achieve total return over time, and despite the market's lack of understanding of these structures, historically, these firms have shown resilience during downturns, indicating their strength.
- Rising Default Rate Risks: Industry experts warn that default rates in private credit could double in the coming years, with Morgan Stanley analysts suggesting defaults may reach 8%, reflecting growing concerns over loan quality, particularly as AI disrupts software companies.
See More
