The Credit Edge by Bloomberg Intelligence Distressed Buyer H.I.G. Sees Most Loan Distress in Years (Podcast)
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Feb 5, 2026 Jackson Craig, co-head of H.I.G. Bayside, a distressed-debt specialist. He discusses rising loan distress from low-rate vintages. Topics include private-credit defaults, sector pain in chemicals, forced CLO selling and liability-management pressures. He also covers how H.I.G. sources, structures and prices private-market turnarounds.
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Underwrite For Downside Cashflow
- Insist on downside durability and cashflow when underwriting stressed companies.
- Avoid non-cashflow valuation approaches and prefer absolute value defensibility.
Deals Flow Via Restructuring Advisors
- HIG uses longstanding relationships with restructuring advisors to source deals.
- Those advisor channels and HIG's internal platforms surface repeat deal flow for them.
Private Credit Has A Third State: Bad PIK
- Private credit default/forbearance mixes create a 'bad PIK' state absent in syndicated loans.
- Combining PIK-accruing and defaults yields roughly a ~5% effective default rate in private credit.