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Kroll and StepStone Unveil Payment-in-Kind Indicators for Enhanced Private Credit Insight

In a significant move to bolster transparency in private credit markets, Kroll and StepStone Group have launched three new Payment-in-Kind (PIK) indicators within the Kroll StepStone Private Credit Benchmarks. This initiative is designed to provide investors, lenders, and analysts with greater clarity regarding the role of noncash interest within the realm of private credit.

The newly introduced indicators encompass more than 28,000 direct lending instruments, along with insights from 18,000 deals and 13,000 borrowers, ensuring a comprehensive historical view dating back to 2012. These metrics offer investors valuable data about the dynamic presence of PIK loans, revealing how they impact overall interest income and lending trends across various sectors and borrower sizes.

The Significance of PIK Indicators

The three distinct metrics introduced help track the utilization of PIK loans across the U.S. and Europe:
1. PIK as a Percentage of Interest Income: This metric tracks the portion of interest income derived from PIK loans.
2. Proportion of PIK Loans Based on Deal Count: This indicates how many deals involved PIK loans compared to overall lending activities.
3. Proportion of PIK Loans Based on Outstanding Principal: This reveals what percentage of the total outstanding principal is made up of PIK instruments.

These indicators not only furnish a reliable perspective on PIK activities across different geographical regions and sectors but also highlight trends over time. For instance, recent data indicates that globally, the use of PIK is actually moderating rather than accelerating. As of October 10, 2026, PIK accounted for 2.86% of interest income from loans originated within the past year, starkly down from 6.67% noted at the end of the second quarter of 2026.

Market Commentary and Strategic Implications

Michael H. Dolan, President of Financial Advisory at Kroll, emphasized the importance of understanding PIK loans amidst evolving economic landscapes characterized by heightened borrowing costs and uncertainty. He noted,

“PIK is crucial for grasping underlying dynamics within private credit. Differentiating between cash-based and PIK interest is vital for evaluations of liquidity, credit quality, leverage, and ultimately, business valuation.”

As the private markets landscape continues to expand, possessing independent data and in-depth analysis becomes even more vital. This data-driven approach provides investors with insights crucial for navigating the complexities of private credit markets, allowing them to distinguish between isolated pressures and broader market trends, fostering greater confidence among stakeholders.

Marcel Schindler, Partner and Head of Private Debt at StepStone Group, further reiterated the necessity for enhanced understanding of financing structures as the private credit sector diversifies. According to Schindler,

“The evolving landscape of private credit demands nuanced analysis for investors to evaluate opportunities effectively.”

A Glimpse into the Future

Launched in September 2025, the Kroll StepStone Private Credit Benchmarks have already proven to be a powerful tool for market participants. By providing extensive data and analytics derived from thousands of lending instruments, participants can analyze multifaceted dimensions of private credit, including variations by market segment, sector, and lien position. The recent enhancements to these metrics represent a strategic advancement that further enriches analysis capabilities.

With the implications of these new indicators reverberating through both the investment community and the broader credit market, stakeholders are encouraged to delve into these insights to refine their strategies, enhance comparisons of investment opportunities, and maintain an agile approach to market changes. For more details or to explore this innovative feature, interested parties can request a demo through Kroll's platforms.

About Kroll: As a leading independent provider of global financial and risk advisory solutions, Kroll combines unique insights, data, and technology to assist clients in navigating complex valuation demands. With a team of over 6,500 professionals worldwide, Kroll boasts a nearly century-long history of expertise in risk management, governance, transactions, and valuations.

About StepStone Group: StepStone Group, listed on Nasdaq as STEP, is a forward-thinking investment firm specializing in customized solutions across private markets. Following its commitment to clients, as of late June 2026, the firm managed approximately $913 billion in capital across diverse investment types, including private equity and infrastructure, highlighting its significant role in shaping global investment landscapes.

For further inquiries, please visit Kroll's website or StepStone Group’s portal for comprehensive insights and data on private credit investments.