Kroll, an independent provider of global financial and risk advisory solutions, and StepStone Group (Nasdaq: STEP), a global private markets investment firm, launched three new payment-in-kind (PIK) indicators within the Kroll StepStone Private Credit Benchmarks, giving lenders, investors and analysts greater visibility into the use of noncash interest across private credit. The indicators cover more than 28,000 direct lending instruments, 18,000 deals and 13,000 borrowers, with historical data extending back to 2012.
The new measures track loans with an active PIK component across the U.S. and Europe as well as across different sectors and obligor-size segments using three metrics:
- PIK as a percentage of interest income
- The proportion of PIK loans based on deal count
- The proportion of PIK loans based on outstanding principal
The data offers a view of the role noncash interest plays in private credit markets, including the variance in PIK activity across EBITDA segments, geographies and sectors. For example, the Benchmarks indicate that on a global basis PIK use is currently moderating rather than accelerating. Across loans originated globally during the previous 12 months, PIK represented 2.86% of interest income as of Oct. 10, compared with 6.67% across the global cohort of outstanding loans at the end of Q2/26.
“Private credit and private capital markets have demonstrated relatively solid fundamentals, despite a prolonged period of higher borrowing costs and economic uncertainty. PIK is an important part of understanding what is happening beneath headline returns in private credit; the distinction between interest paid in cash and interest added to debt matters when assessing liquidity, leverage, credit quality and ultimately value,” Michael H. Dolan, president of financial advisory at Kroll, said.
“Operating at the intersection of value, risk and transactions gives Kroll a unique perspective on these dynamics. As private markets continue to grow and become increasingly complex, independent data, analysis and expertise become more important in distinguishing isolated pressure from broader market trends, bringing greater clarity and peace of mind to investors,” Dolan said.
“The growth and evolution of private credit have created a more diverse market, making it increasingly valuable to understand how financing structures are changing alongside it. Greater visibility into PIK activity across markets, sectors and borrower sizes provides another dimension for assessing market dynamics, comparing opportunities and understanding how portfolios are evolving over time,” Marcel Schindler, partner and head of private debt at StepStone Group, said.
The Benchmarks, launched in September 2025, allow users to analyze private credit across multiple dimensions, including market segment, sector and lien position.
