Case Study: Exponential achieves predictive covenant risk management with Allvue Systems

Allvue Alpha Where Private Market Data Meets Performance

Exponential partnered with Allvue Systems to improve covenant monitoring in private credit, where traditional leverage ratios can miss early signs of borrower stress. The team needed a better way to compare borrowers against relevant peers over time, rather than relying only on static covenant thresholds.

Allvue Systems provided percentile-based benchmarking through its private credit data and analytics platform, using refreshed compliance and amendment notices to recalculate relative risk each quarter. The solution helped Exponential spot deterioration earlier, including in the PODS example where leverage remained technically compliant but the percentile rank surged from the 60th to the 93rd percentile; across Allvue’s historical analysis, a 25-point percentile jump over two quarters was associated with a 67% chance of covenant breach within a year, compared with 24% for borrowers tracked only by absolute ratios.

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