Private credit commentary throughout 2025 and into 2026 revolved around covenant structures, default frequency, and whether specific high-profile failures signaled broader weakness. Those are legitimate concerns. What attracted considerably less attention was a simpler question: how big are the companies borrowing this money?
James Clarke, Blue Owl Capital’s global head of institutional capital, offered a figure during a Bloomberg interview that cuts through much of the noise. The firm’s average borrower generates $300 million or more in annual EBITDA (https://www.globalbankingandfinance.com/blue-owl-capital-s-borrowers-average-300-million-in-ebitda/). At a standard 10x multiple, that implies an enterprise value around $3 billion. A company at that scale, even one facing a significant operational stumble, typically produces a restructuring conversation rather than a liquidation.
Why Size Changes the Credit Math
Larger borrowers come with structural advantages that smaller companies simply don’t have. A $3 billion enterprise typically maintains relationships with multiple lenders, employs a full treasury operation, and can access public and private refinancing channels simultaneously. When credit stress hits, these companies have more paths forward and more time to find them.
For a senior secured lender positioned at 30% to 40% loan-to-value, the borrower’s size creates a double layer of protection. The equity cushion beneath the debt is substantial ($1.8 billion on a $3 billion enterprise at 40% LTV), and the company’s institutional resources make it more likely that cushion will be preserved through active management rather than eroded through neglect.
Why It Gets Ignored
Credit analysis gravitates toward variables that generate debate: sectors, covenant terms, interest coverage ratios. These are measurable, comparable, and easy to discuss in quarterly reports. Borrower size is harder to debate and less dramatic as a topic. But when a lender holds a first-lien position against a company with $300 million in EBITDA and $1.8 billion of equity sitting beneath the loan, the question of how far enterprise value needs to fall before the lender loses money is arguably more consequential than which sector the company operates in.
Moody’s appeared to agree. The agency’s January 2026 upgrade of Blue Owl Capital Corporation cited borrower scale alongside portfolio seniority and conservative leverage as factors supporting the Baa2 rating (https://finchannel.com/moodys-upgrades-blue-owl-bdcs-to-baa2/129475/american-business-trends/2026/02/). Rating agencies, which evaluate credit through multi-year windows rather than quarterly sentiment, tend to weight borrower size more heavily than equity-focused analysts do.
Size doesn’t eliminate credit risk. What it does is change the math in favor of the lender.