By Utkarsh Shetti and Tala Ramadan ABU DHABI, Dec 9 (Reuters) – Blackstone CEO Stephen Schwarzman said on Tuesday that he did not share market concerns over private credit relating to recent bankruptcies in the autos sector. “There were several bankruptcies that were popularized in October … and they were blamed on private credit,” Schwarzman […]
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Blackstone’s Schwarzman plays down private credit concerns over bankruptcies
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By Utkarsh Shetti and Tala Ramadan
ABU DHABI, Dec 9 (Reuters) – Blackstone CEO Stephen Schwarzman said on Tuesday that he did not share market concerns over private credit relating to recent bankruptcies in the autos sector.
“There were several bankruptcies that were popularized in October … and they were blamed on private credit,” Schwarzman said in a video presentation during Abu Dhabi Finance Week.
“In fact, all three deals were due diligence by banks, underwritten by banks, syndicated by banks, and private credit was sort of not in the room,” he added.
The collapse of First Brands and subprime auto lender Tricolor has forced some debt investors to cut their exposure to certain sectors over concerns of weakness in consumer and auto lending and prompted a slowdown in the credit rally.
The fallout has sharpened scrutiny of a market that has grown quickly, with heavy institutional investment and rising corporate lending in recent years.
Schwarzman said banks were leveraged at least 10 to 1, while private credit was around 1.4 times, adding “private credit is actually much more conservative for the system”.
(Reporting by Utkarsh Shetti and Tala Ramadan in Abu Dhabi; Editing by Alexander Smith)