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Investing.com - BNP Paribas Exane downgraded Intermedia Capital Group (LSE:ICG) (OTC:ICGUF) from Neutral to Underperform on Wednesday, setting a price target of GBP21.00.
The downgrade comes as BNP Paribas Exane expresses concerns about the risk/reward profile in the credit asset class, which directly impacts ICG’s balance sheet. The firm notes that while major credit defaults in the US appear to be isolated cases, competition in the credit market remains intense.
BNP Paribas Exane points to "extremely borrower friendly" terms resulting from the competitive environment, which could constrain ICG’s ability to deploy capital effectively. The firm also observes that credit indices are beginning to show "small cracks" in the market.
The research firm suggests that the de-rating trend already observed among US private asset managers could potentially spread to other private debt managers, including Intermedia Capital Group.
This downgrade reflects BNP Paribas Exane’s view that current market conditions in private credit may create headwinds for ICG’s business model and future performance.
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