When PE backed companies get in trouble with lenders, they have a few options: 1. Negotiate PIK interest meaning they pay the interest in equity in lieu of cash. This lessens the cash burden on the company and pushes the issue down the line 2. Refinance the debt with a friendlier lender or terms 3. Put in an equity cure from the fund. This can tank IRR and piss off LPs 4. Write off the investment and hand control over to the lenders For all lenders to refuse a PIK deal means they don’t have confidence in the equity being worth enough to replace their cash interest with. Generally not a good sign. The public will never know until much later as these are privately held companies. This is how a “private credit problem” becomes a private equity problem. This opacity is precisely what makes underwriting private loans difficult and how TradFi contagion can spread faster than you think. Know what you are investing in. A lot of RWA folks on here shilling big institutional brand names and can’t explain the first thing about how these funds work. Big name does not equal safe. Tokenization doesn’t change the risk factors. Get smart with @plumenetwork’s RWA Academy.

Most people don’t realize that ETFs are a relatively new phenomenon. In the early 2000s and then again in the 2010s, asset managers fought an uphill battle selling the product. It all started with education. RWAs are following a similar trajectory. Slowly, then all at once.

We have a habit of oversimplifying things in this space. "Private credit" is not an asset class. It's a capital structure. Historical returns by credit stack: - 1st lien senior secured: SOFR + 475–550bps → ~9–11% all-in - 2nd lien: SOFR + 700–800bps → ~12–14% all-in - Mezzanine: historically 14–18%, often w/ equity kickers - Sub/junior: 16–20%+ Same "private credit" label. Wildly different risk profiles. First lien has a hard collateral claim. Sub debt gets paid if there's anything left. That gap in recovery risk is why the yield spread exists — and why grouping them into one category is intellectually lazy (and risky). Banks issue all of these too. Senior, sub, mezz — none of this is exclusive to private credit. The "private" just means it wasn't bank-syndicated. The RWA space needs to get better at this. Any vault offering "private credit yield" should tell you exactly where in the stack it sits.