Help With Credit Terms

Here you go:

1) Corporate Credit - Often used to delineate investing in public TL / Bonds, usually HY & Levered Loans. You will see this a lot in the HF space and depending on sub-strat can target distressed securities as well. Key to remember is focus is on the public side.

2) Private Credit - a little bit of a misnomer in the context which you are asking b/c you really should be thinking about it the say way you would consider PE. Which is to say that just like where Growth Equity, Buyouts, VC, ect are all wrapped in the PE bubble, PC will involve any sort of investment solution within the credit sphere that wouldn't be focused towards the public side. For example, Direct Lending, Structured Credit, Mezz, ect would all fall into the PC category.  

3) Hybrid Credit - depending on the person you talk to they will debate whether or not this is mostly just another term for Mezz, but usually Hybrid Credit implies a certain level of flexibility to invest in one or more tranches across the capital structure and can be public / private (though it's been veering towards private in recent years). In practice it tends to be funds that will invest in converts, pref with debt like features, synth equity, senior with warrants, or sometimes minority equity co-invest (on a company they have previously funded debt on). Kind of a catch all in some respects but the key is to remember the flexibility to provide solutions across the capital structure in usually a debt + equity construct.

4) Direct Lending - Another strat within the PC ecosystem. This usually takes the form of Sponsor Backed financing for either a new acquisition or a refi. Easily the most vanilla of the bunch and definitely Corporate Banking 2.0

5) Opportunistic Credit - a bit of a can of worms. The old saying goes if you ask 10 "opportunistic credit" inventors what they do you'll get 11 different answers. As one myself I somewhat resonate. Opportunistic used to be somewhat synonymous with Special Sits & Distressed Credit strats but has really morphed in recent years into flexible capital solutions on the private side. Usually a flexibility in the mandate to invest private focused with the ability to tap into secondaries based on the relative return profile. On the private side this has manifested in some interesting rip your face off ABL RCF constructs, Sub Senior Debt financings, Senior + Warrants, Rescue Financings, ect. Unsurprisingly many of the guys in this have distressed backgrounds in some form or fashion. Regardless, I think the key to remember is these teams are underwriting harrier deals (which can take just way too many forms to all list out) with a strong emphasis on enhanced yields, LTV, underlying collateral package, pretty restrictive covenants, ect. Doesn't always have to be distressed but more often then not if your company is talking to one of the real "opportunistic" credit teams then something is going on. BlueTorch is a pretty decent example if you want to get a feel for the type of investing happening here. 

Hope this helps!