As global private debt assets under management continue to grow – they are projected to reach over $2.6 trillion by 2026 – it is essential for lenders to effectively respond to the increasing risk of cyber incidents. When engaging in diligence on a potential borrower, lenders should understand how to assess the efficacy of a borrower’s cybersecurity program, including whether it has appropriate written policies and procedures in place. In this two-part guest article series, Proskauer partners Ryan P. Blaney, Bharat Moudgil and Evan Palenschat discuss considerations to prevent and mitigate the effects of a borrower’s cyber incident. This first article analyzes the cost of breaches and why vigilance is urgent, and provides steps to take to assess a borrower’s preparedness. The second article will cover how to prepare for and address a borrower’s breach. See “How to Conduct Effective Privacy and Data Security Diligence to Ensure Value Realization in Mergers, Acquisitions and Divestitures” (Dec. 14, 2021).