Private credit valuation with every loan mark set beside its evidence, its last mark and its peers
Documented support for every mark, ready for committee and auditor.
See one case, screen by screen ↓Software that helps a credit fund or BDC adviser set a fair value mark for every loan each quarter and document why — the inputs, the method, the independent range and who approved it. Private Credit Valuation adds six agents that read the borrower’s reporting, price the market, run the yield analysis and draft the memo and mark bridge, so the valuation team starts from a supported proposal.
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Each quarter every loan in the book needs a fair value mark with documented support: how the borrower performed, how yields moved, what comparable loans are marked at, and any amendment, waiver or payment-in-kind switch. Almost all of it is Level 3 — valued with a model, not a quoted price — and the adviser, as the board’s valuation designee, has to show the method, the inputs and the reason for every mark.
So the valuation team rebuilds that support by hand between the valuation date and the committee: monthly packages re-keyed into one workbook per loan, covenants re-computed by each agreement’s definitions, spreads pulled from dealer runs, the independent firm’s ranges pasted in, and the reason for each move written up in email. With marks falling across the market, an unchanged mark needs its reason too — and an unsupported or stale mark becomes an audit adjustment or an exam finding.
Estimated split for one quarter’s marks, in working days, by hand and with the solution.
Six specialist agents build each mark's evidence and bridge; the head of valuation proposes and the committee approves.
Brookhaven Dental Partners, a $186.16M unitranche in Halberd Lane Capital Corp., sent its September package and compliance certificate after the weekend run. Here is how its 3Q26 mark is made, screen by screen, in the working solution.
Elena opens the peer map: all 142 positions, $4.99B par, each at its net leverage and its required spread over SOFR. The agents proposed 141 marks over the weekend — 108 down, 11 unchanged, 22 up. One loan waits as a ring with “new inputs · run”: Brookhaven Dental, still at last quarter’s 98.50.
“New since the weekend run: September monthly package and 3Q26 compliance certificate · received Fri 9 Oct, 18:40.”
Elena runs the valuation on the new inputs. On the map two quoted dental term loans widen — Bayfront Smile Holdings +52 bp, Crescent Orthodontic Group +44 bp — and Brookhaven’s dot drifts away from its ring, 98.50 to 95.40. The rail lists the evidence behind it: the same loan in three other funds at 98.75, 97.90 and 98.25, the Summit Oral Surgery deal priced at S+6.25%, and LTM EBITDA down 13.1% to $55.8M.
“Why 95.40 · the evidence” — 16 sources, each line linked to its document.
The position opens with every agent step and what it found: the financials reader on the package and certificate, the event watcher on Amendment No. 3, the market analyst on spreads and comparables, the yield model, the independent range, the memo. Proposed 95.40, −3.10 points, −$5.61M — inside Northfield’s 94.75–96.25. Three reasons send it to the committee, and one finding needs a look.
“Moved more than 2 points — 98.50 → 95.40, −3.10 points (−$5.61M). Settings: a move over 2.00 points goes to the committee.”
Five quarters side by side. This quarter: LTM revenue $471.9M, reported EBITDA $55.8M, net leverage up from 5.17x to 6.05x, cash interest cover down from 1.95x to 1.66x. The compliance certificate adds back $6.1M for 14 de novo offices — 5 open, 9 under lease and not open. As certified, leverage is 5.46x with a 19% cushion to the 6.75x covenant; on reported EBITDA it is 6.05x with 10%.
“For the mark, the agents use the reported $55.8M — a buyer of the loan would not pay for offices that have not opened.”
The yield starts from the 10.55% implied by the approved 98.50 mark, then adds +0.35% for comparable unitranche spreads, −0.20% for the base rate passed through the floating coupon, and +1.60% from the fund’s leverage grid for 6.0–6.5x. Coupon 10.20%, duration 2.19: price 95.40. Coverage on an 11.0x multiple is 1.82x, so the yield method holds.
The mark bridge walks 98.50 to 95.40: comparable spreads −0.77, base rate 0.00, credit-specific −3.50, Amendment 3 payment-in-kind +1.10, shorter remaining life +0.07. Above it the mark sits beside last quarter, the six comparable loans in the book (median 95.93), the same loan in other funds (median 98.25) and Northfield’s point of 95.50.
The memo is drafted in the policy’s order — conclusion, performance, credit events, yield analysis, market and comparables, coverage, why the committee — with a citation on every number, and Owen Tran’s analyst review already on it: “Inputs tie to the package”. Elena adds a downside case: EBITDA a further 10% lower at a 10.0x multiple still covers net debt 1.49x, above the 1.25x line.
Elena proposes 95.40 as exception 1 of 7, with the meaning of her signature — “Reviewed — propose to the committee” — her name and her password. She could have overridden the mark instead; an override shows in the memo and to the committee with its reason.
“Your signature, the time, the mark and the memo version are written to the audit trail and kept for six years.”
The committee sees seven exceptions from 142 positions — $460.4M of fair value under review. Ridgeline Freight moves to recovery with non-accrual proposed, Solstice Home Health sits above Northfield’s range, Copperline Packaging has been unchanged three quarters while comparable spreads widened 0.45%, Talon Aerospace is capped at its 101.00 call price. The pack goes with 7 memos, the fund bridge and Northfield’s letter; Daniel Brandt recuses on Ridgeline.
Claire’s 25-position sample shows, for each loan, the inputs, the method and model, the independent range, the memo and the approval: 18 of 25 complete, 7 waiting for the committee, 412 documents in the file. Of her three requests this week, the agents answered two; the third — why Copperline stayed at 100.00 — is with Elena.
The same quarter, seen by the people who make, review, approve and test the marks — what it looked like before, and what it looks like now.
Six specialist agents build each mark's evidence and bridge; the head of valuation proposes and the committee approves.
Reads monthly packages and compliance certificates, and re-computes leverage, cover and covenants by each credit agreement’s definitions.
Finds amendments, waivers, payment-in-kind switches, rating moves and non-accrual triggers in the quarter.
Prices the market: comparable loan spreads, transaction multiples and the same loan’s marks in other funds’ public schedules.
Runs the yield analysis calibrated to the last approved mark, the coverage test and sensitivities; recovery analysis when coverage fails.
Compares every proposed mark with the independent valuation firm’s range and point.
Drafts the memo and the mark bridge for every position, and queues the exceptions for the valuation committee.
Proposes each mark; the committee approves. The agents propose; a named person decides.
The valuation team can ask about any position in plain words — or ask it to run a case. Every answer cites its source.
Why is Brookhaven Dental marked down 3.1 points?
Three things moved the required yield from 10.55% to 12.30%: comparable spreads +0.35% (−0.77 points), leverage 5.17x to 6.05x +1.60% (−3.50), and Amendment 3’s paid-in-kind coupon +0.50% (+1.10), with +0.07 for the shorter life. EBITDA fell 13.1% to $55.8M after a dental plan dropped 31 offices. So 98.50 becomes 95.40, inside Northfield’s 94.75–96.25.
Run a downside: EBITDA down another 10%
At $50.2M EBITDA and a 10.0x multiple, enterprise value is $502.2M against $337.8M of net debt: coverage 1.49x, loan to value 67%. That is above the 1.25x line, so the yield method still applies. If the leverage grid added another 0.50%, the price would be 94.31 — just below Northfield’s 94.75. I have added this as section 7 of the memo.
Which marks sit outside the independent range?
One of the 41 positions Northfield reviewed: Solstice Home Health, proposed 93.25 against a range of 91.00–92.50. Northfield weights the Medicare home-health rate cut more heavily. Policy is to move into the range or take it to the committee with a reason — it is exception 3.
Draft the committee summary for the seven exceptions
3Q26 valuation — for the committee, Thu 22 Oct. 142 positions marked; weighted average 97.48 → 96.71; unrealized −$38.4M. Seven exceptions: Brookhaven Dental 95.40, Ridgeline Freight 79.50 on recovery with non-accrual proposed, Solstice Home Health 93.25 outside the range, Copperline Packaging held at 100.00 pending a par refinancing, Verity Learning 90.75 after its amend and extend, Harbor & Pine 54.00 on June data, Talon Aerospace capped at the 101.00 call price.
13 screens from the working solution, on its sample data. Pick one to see it large.
The policy every mark is checked against is a set of settings. Changes are versioned, on the audit trail and reported to the board.
| Setting | Default | Choose from |
|---|---|---|
| A quarter’s move that goes to the committee | Over 2.00 points | 0.50 to 5.00 points, in steps of 0.50 |
| Stale mark | Two quarters, spreads over 0.25% | Two quarters, spreads over 0.25% · One quarter, spreads over 0.25% · Two quarters, spreads over 0.50% |
| Move to recovery analysis when enterprise value covers net debt less than | 1.25x | 1.10x · 1.25x · 1.50x |
| Price cap | On | No mark above the price the borrower can repay at |
| Borrower financials flagged as stale after | 90 days | 60 · 90 · 120 days |
| Add-backs in valuation EBITDA | Excluded | Excluded · Included up to the agreement’s cap |
| Independent review rotation | 25% a quarter, all within a year | 25% a quarter, all within a year · 50% a quarter · Every position, every quarter |
| Always independently reviewed | Moves over 2 pts · below 85 · non-accrual | Added to the rotation regardless |
Every figure is labelled: a target the solution is built to, an estimate, a typical published result, or a proven one.
“demo” = seen in the working solution, on its sample fund data · “target” = the design goal, measured in the live solution · “estimated” = our estimate · “typical” = published figures (LSTA, BDC Quarterly Wrap 1Q26 — 77% of BDCs marked term loans down, 7.6% of portfolios below 85; Lumonic, private credit valuation buyer’s guide — one manager’s portfolio-review preparation went from two to three weeks to two to three days). SEC Rule 2a-5 and ASC 820 are named as context. People, funds, borrowers and firms named on this page are fictional — characters and sample data in the working solution.
Software that helps a credit fund or BDC adviser set a fair value mark for every loan each quarter and document why — the inputs, the method, the independent range and who approved it. Private Credit Valuation adds six agents that read the borrower’s reporting, price the market, run the yield analysis and draft the memo and mark bridge, so the valuation team starts from a supported proposal.
For a performing loan, the yield model starts from the yield implied by the last approved mark and adds the change in comparable spreads, the base rate and the credit-specific premium from your leverage grid, then prices the cash flows. It tests enterprise value coverage; below your threshold (1.25x by default) it moves to recovery analysis. No mark goes above the call price.
No. Your firm uploads its range letters, and the independent range reconciler sets every proposed mark beside its range and point. A mark outside the range moves into it or goes to the committee with a reason; the agents never move a mark into the range to make it fit.
Yes. The agents propose; the head of valuation reviews, can override with a reason, and proposes each mark with an electronic signature; the valuation committee approves. The memo writer never sets or approves a mark, and the event watcher never decides a non-accrual.
A read-only evidence file for their sample: for each position the inputs, the method and model, the independent range, the memo and the approval. The auditor can ask questions there; in the working solution the agents answered two of three requests with the memo and the source documents.
Yes. A mark unchanged while comparable spreads moved goes to the committee — by default two quarters with spreads over 0.25% — and borrower financials older than 90 days are flagged. Both thresholds are settings.
Borrower monthly packages and compliance certificates, credit agreements and amendments, market spread and transaction data, other funds’ public schedules of investments, your independent firm’s range letters, and fund accounting for the approved values.
The Agentic Solution Engine builds and deploys it from your requirements — your valuation policy, leverage grid, memo template and a sample of last quarter’s positions — and it goes live once every quality gate has passed. We will walk you through it on your own book first.
First-pass screen in minutes, not half a day, every deal read.
1-min demoPrivate Credit Portfolio MonitoringStressed loans flagged a quarter or more before non-accrual.
1-min demoInvestor Reporting AutomationInvestor questions answered in a day, every figure traced to the books.
1-min demoWe’ll run Private Credit Valuation on a sample of your own positions and last quarter’s marks.