#USA #New York #Kroll #private credit #StepStone

Kroll and StepStone Launch Payment-in-Kind Indicators for Private Credit Benchmarks

On October 29, 2026, Kroll and StepStone Group unveiled three new payment-in-kind (PIK) indicators within the Kroll StepStone Private Credit Benchmarks. This initiative aims to provide lenders, investors, and analysts with enhanced visibility regarding the use of noncash interest in private credit, a segment that has evolved significantly over recent years.

The newly developed indicators analyze over 28,000 direct lending instruments, covering 18,000 deals and 13,000 borrowers, with historical data available from as far back as 2012. Such comprehensive insights are invaluable for understanding market dynamics and making informed investment decisions.

Understanding the Indicators

The new PIK indicators offer a nuanced view of how noncash interest influences private credit markets. The metrics include:
1. PIK as a percentage of interest income: This metric assesses the overall proportion of loans featuring an active PIK component in relation to total interest income.
2. The proportion of PIK loans based on deal count: A count of how many loans within the dataset are classified as PIK loans.
3. The proportion of PIK loans based on outstanding principal: This indicator evaluates the total outstanding principal tied to PIK loans as a percentage of the overall principal.

These indicators provide substantial data on how PIK usage varies across different segments, including geographical locations and borrower sizes. For instance, the benchmarks reveal that as of October 10, 2026, PIK represented a mere 2.86% of interest income for loans originated globally in the previous year. This is a notable decline compared to 6.67% for outstanding loans by the end of Q2 2026, highlighting the changing usage patterns of PIK in the current economic climate.

Insights from Kroll

According to Michael H. Dolan, President of Financial Advisory at Kroll, the fundamentals in private credit and capital markets remain relatively strong, despite ongoing economic uncertainties and increased borrowing costs. Dolan emphasized the importance of recognizing the distinction between cash interest payments and interest that is accrued as part of the debt. Understanding these dynamics is crucial for assessing liquidity, leverage, credit quality, and overall value within private credit.

At Kroll, the organization operates at the intersection of value, risk, and transactions, giving it a unique perspective on market dynamics. As private markets continue to grow in complexity, the demand for independent data and expertise becomes even more essential to differentiate between isolated issues and broader market trends.

Marcel Schindler, Partner and Head of Private Debt at StepStone Group, echoed this sentiment, highlighting the diverse nature of the evolving private credit landscape. Schindler noted that increased visibility into PIK activity can greatly assist market participants in evaluating investment opportunities and understanding portfolio adjustments over time.

The Role of Kroll StepStone Private Credit Benchmarks

Launched in September 2025, the Kroll StepStone Private Credit Benchmarks facilitate a deeper understanding of market activities through detailed analyses of private credit across various dimensions. Users can explore multiple metrics, including market segments, sectors, and lien positions. The benchmarks not only support investment decisions but also foster transparency within the private credit sector.

By making these new indicators available, Kroll and StepStone are taking substantial steps to enhance the analytical toolkit for stakeholders in private credit. This is especially timely as investors strive for clarity in navigating the complexities of the private markets.

As these markets remain a crucial component of the global economy, having access to reliable data and insights becomes imperative for making strategic investment decisions. The Kroll StepStone Private Credit Benchmarks stand out as a vital resource for anyone involved in or affected by private credit investments, offering an essential framework for understanding market trends and dynamics in a rapidly changing environment.

For those interested in learning more about these newly introduced indicators and how they can impact investment strategies, further information and demo requests can be made on the Kroll and StepStone websites.