Software Drives Sequential Jump in Borrowers Switching to PIK Interest in Q2 Led by Marketing & Media Intelligence Platforms; List Available for Download Includes 48 Borrowers, Representing $2.5B of Principal

Credit Research: Mark Fischer Relevant Items: Octus’ BDC Database Link to Excel Download of 48 Borrowers Switching to PIK Interest   Key Takeaways   The amount of loans that had interest converted from all cash to at least partially PIK increased significantly in the second quarter, jumping to 48 loans representing $2.5 billion of principal up from 32 loans and $1.3 billion in the first quarter.   Moving cash to at least partially PIK could be an early indicator of stress. Similar to prior quarters, maturities of loans in the dataset averaged 2029. Average pricing across loans converting to at least partially PIK was 92.1% of par.   It is unclear whether those moves were included as part of original agreements or a result of recent negotiations with lenders. However, the average rate of PIK interest was 5%, indicating elevated levels of stress among borrowers.   Software companies represented the largest group of borrowers shifting to at least partial PIK interest, with concentrations in companies exposed to marketing and media intelligence platforms.   Other subsectors with concentrations of loans include companies providing environmental and restoration cleanup services and health care service providers. Octus has identified 48 borrowers, totaling $2.4 billion[...]