Time and place: Spring/early summer 2027 – exact dates tba, Aalto University School of Business, Espoo.
Learning goal and objectives: Private credit has moved from a niche corner of the loan market to a core segment of corporate finance that now competes directly with banks and the syndicated loan market. The course asks three questions in turn. First, why these lenders exist: what theory and evidence say about which borrowers are financed by banks, by public markets, and by private funds, and how that boundary moved after the post-crisis reforms. Second, what is inside the contract and what we can actually measure: loan terms, monitoring and renegotiation, PIK and amendments, and the valuation, ratings and performance-measurement problems that arise when the asset has no market price. Third, how fragility is private credit? Private credit funds are themselves levered, so we turn to their liability side, i.e. bank credit lines, securitizations, unsecured bonds and redeemable retail equity, and to what this implies for rollover and run risk, bank–nonbank interconnectedness, and the policy debate at the ESRB, FSB and IMF. Throughout, the course is organized around the data: what BDC filings, fund-level and loan-level datasets can and cannot identify, and which open questions are ready to be written.
Credits: 3 ECTS credits
Grading: TBA
Prerequisites: TBA
Admittance: 25 students. Finance PhD students have priority, but the course is also open for KATAJA-, FDPE-, and foreign doctoral students given that there is space in the course. Applications are sent directly to gsf@aalto.fi and application deadline will be announced later on in the course web page that can be found here in due course: https://gsf.aalto.fi/studies/. The acceptances will be announced shortly after the registration deadline.
Instructors: Professor Sascha Steffen (Frankfurt School of Finance & Management)
Course coordinator and contact information: Reetta Ali-Alha, gsf@aalto.fi, 040 353 8061.