'When things go bad, all things go bad': The risks behind the private credit boom

Moody's sets warnings

Private credit providers have increasingly gained a sizeable market share of corporate lending over recent years, sparking concerns about its durability and whether it has been adequately stress tested by volatility and macroeconomic headwinds.

The asset class sprung to prominence over the past decade after lending through traditional bank channels was constrained by regulation following the 2008 global financial crisis, allowing private credit providers to become an established go-to source of corporate loans to middle-market firms.  Coupled with this, increased investor appetite for private markets, both on the equity and credit side, has seen capital flood towards the asset class, with top talent also flocking to major private credit providers such as Blackstone, Apollo Global Management, Oaktree Capital Management and Ares ...