The private credit market, in particular the direct lending and infrastructure segments, continues to grow at a rapid pace and is now likely larger than both the broadly syndicated loan (BSL) and high-yield bond markets, based on some estimates. According to Preqin, private credit assets under management reached $1.7 trillion as of June 2023. This figure, however, excludes additional capital derived from the leverage that exists in many funds, as well as additional capital from private credit collateralized loan obligations (CLO) and business development companies (BDC). In KBRA’s view, the amount of private credit capital raised and/or deployed for middle market and infrastructure lending likely exceeds $2 trillion.
A similar strong growth trend is reflected in KBRA-rated private credit transactions, which include assigned ratings to 220 tranches of debt across 122 private credit transactions to middle market credit funds, infrastructure funds, and private credit fund-of-funds as of…