How Stress Testing Works for Private Credit Deals

Why a spreadsheet stress test breaks down under real deal pressure

Most credit teams stress test a loan the same way they underwrote it: one analyst's spreadsheet, rebuilt from scratch before every credit committee meeting. That works for a single deal reviewed once. It stops working the moment a book of 30+ credits needs the same downside scenario applied consistently, on short notice, without each PM's model drifting from the next.

The result is familiar to anyone who has sat through a committee meeting: numbers that don't reconcile between two analysts' versions of the same stress case, and hours spent rebuilding a scenario that should take minutes to re-run.

Three independent engines, not one generic model

T.HESIS runs CRE, OpCo/LBO, and Private Credit through three separate underwriting engines rather than forcing every asset class through one generic template. The Private Credit engine tracks covenant structure, borrowing base, and DSCR directly against the loan's actual terms, not a proxy.

Four scenario modes, applied consistently across the book

Every credit runs the same four modes — Base, Stress, Bear, and Macro Shock — so a covenant breach shown in the Bear case for one loan means the same underlying assumption shift as the Bear case for every other loan in the portfolio. Each mode produces a live covenant breach timeline and DSCR trajectory, not a single point-in-time number.

Because the scenarios run against the same live pipeline and portfolio data the team already works in, re-running a stress case after a rate move or a tenant vacating doesn't mean re-opening a spreadsheet — it means the numbers on screen are already current.