The Magnificent Seven's Debt Binge Is Squeezing Out Private Equity
A $300B 'Debt Wall' Is Looming over Private-Equity Backed Companies
The Mag7's massive debt issuance to fund AI growth is crowding out smaller borrowers, forcing private credit funds to demand higher rates from companies with $15M to $500M in sales. The author, a 20-year credit market veteran, calls it the biggest shock in decades: high-quality corporate debt has flooded the market so fast that credit funds have lost their appetite for lower middle market debt at current spreads.
There is no way a growing company can compete with Google on debt terms, so they have to raise their rates to compete — not because of all rates rising, but strictly because we've just seen a huge debt issuance from some very solid credit companies.