CR TrendLines Topical Report: 1Q25 Private Credit vs BSL Spread & Covenant Update

With market conditions across private credit and syndicated loans running hot in January and February before cooling modestly in March—and more precipitously since—average clearings spreads narrowed further in the first quarter. At the same time, covenant terms were largely stable, based on data compiled by Covenant Review.

Covenants Trends: On average, the Documentation Score of private credits stood at 2.94 on Covenant Review’s scale of 1 (most protective) to 5 in 1Q25. That’s effectively unchanged from 2024’s average of 2.96. At the same time, the average Score among Broadly Syndicated Loans (BSLs) eroded slightly to 3.92 from 3.85

Spread Trends: The average PC clearing tightened to a fresh multiyear low of S+536 in 1Q25 from S+543 in the 4Q24 among Covenant Review’s sample of loans. Note, however, that there is no reported OID data for PC loans, and so the averages in this segment are nominal rather than all-in.