While the $1.7 trillion private credit market is experiencing its first real stress test, the focus has been on fund-level liquidity and investor redemptions. What matters most, though, is the health of the underlying borrowers. And there is nothing more critical to measuring a company’s health and ability to repay debt than its cash flow.
I am a corporate restructuring professional. I think in cash.
No accruals, no Generally Accepted Accounting Principles (GAAP), no adjusted pro forma nonsense. Just the cold reality of what actually hits the bank account and what actually leaves it. Because when a company becomes distressed, all the accounting poetry in the world does not matter. What matters is whether you can make payroll on Friday.
