After years of abundant liquidity and easy refinancing, the credit cycle has turned. For years, companies borrowed money at very low rates and had little trouble refinancing. That period is behind us. Higher interest rates and more cautious lenders now define the landscape.
Many companies face a wave of loan maturities in 2025 and 2026. These loans were taken out when rates were much lower, and refinancing them today is more difficult. Strong businesses with steady cash flow can still borrow on good terms. Weaker companies are under pressure and must pay more or renegotiate their debt.
This creates a clear divide. It also marks a return to basics. Lenders need to look closely at each company, understand its cash flow and structure loans with care. Discipline matters more than it has in years.
Volatility, in this context, is not a threat but a filter. It separates businesses with strong fundamentals from those built on financial engineering. For discerning lenders, it is an environment rich with potential to deploy capital at improved terms, often with stronger covenants and more attractive risk-adjusted returns.
One area gaining more attention is non-sponsored lending. These loans go to companies that are not backed by private equity. Many are founder-led or family-owned and value long-term partners. Because there is less competition in this space, lenders can secure better yields and negotiate structures that help protect investors.
“Periods of dislocation create opportunity, but only for those prepared to move with precision and patience. Non-sponsored credit allows us to do just that.”
– Adam Vigna, Co-Founder and Chief Investment Officer at Sagard
At Sagard Credit, we focus on direct origination, detailed analysis and a flexible approach across senior secured loans and other forms of private credit. We stay close to borrowers and rely on real data to find mispriced risk. Our goal is simple. Put capital to work in situations where due diligence, discipline and patience can create long-term value.
As we move into 2026, borrowing conditions are likely to stay tight. Well-capitalized lenders will continue to have the advantage. For institutional investors, this presents a window to earn attractive yields while building portfolios that combine strong protection with meaningful upside.
The market demands precision, not speculation. Knowledge remains a competitive edge, but only conviction and discipline will separate opportunity from risk. Sagard Credit is positioned to deploy capital with purpose, turning the cycle’s turbulence into long-term value for our investors.
Disclaimer: The views expressed are those of Sagard’s Credit team as of November 2025 and are subject to change. This material is for informational purposes only and does not constitute investment advice or an offer to buy or sell any security. Market conditions are subject to change, and past performance is not indicative of future results.
