Challenged Credit Due Diligence

Proactive Credit Risk Assessment & Intervention

North Castle provides targeted due diligence for lenders facing deteriorating credit situations, offering data-driven insights and actionable solutions to mitigate risks and stabilize borrower performance.

Services

Lender Due Diligence

Lender Due Diligence For
Non-PE Financing

Challenged Credit Due Diligence

Sell-Side Readiness

Corporate Development

Dividend Recapitalization Prep

Challenged Credit Due Diligence

Early Intervention for Struggling Borrowers

The Challenge

  • Quarterly Projections Signal Trouble – Company-provided forecasts reveal potential covenant violations.

  • Limited Access to Key Stakeholders – Lenders struggle to assess issues due to restricted engagement with private equity owners and management.

  • Industry Expertise Exists, But Limited Visibility – While lenders may understand the industry, they lack internal resources to conduct a full financial deep dive.

  • Credit Decay Can Escalate Quickly – Without a structured due diligence process, problems can spiral into default.

Our Approach

  • FDD-Lite Analysis – A targeted review focused on key credit deterioration factors.
    Actionable Solutions – Identifies specific interventions to stabilize financial health.

  • Minimal Management Disruption – Requires limited senior team involvement while delivering high-value insights.

  • Data-Driven Support – Our Data & Analytics team enables sophisticated credit risk assessment.

  • Investment Committee Alignment – Provides clear, focused reporting to support lender decision-making.

Key Benefits

  • Reduces lender risk by identifying and addressing issues before they escalate.

  • Preserves equity value by implementing early-stage corrective actions.

  • Enhances credit committee confidence with an independent, third-party review.

  • Speeds up covenant amendment processes, ensuring efficient resolution.

  • Improves KPI tracking, uncovering new insights for lenders and sponsors.

  • Offers cost-effective, high-impact diligence focused on key credit concerns.

Navigating Risk in Retailer

A private credit fund firm needed to assess the high-yield bonds of a $3.3 billion revenue, $300 million EBITDA rent-to-own retailer in the U.S. amid financial and operational challenges.