Public and private credit markets are converging in performance, with the trend expected to continue through 2025, according to a new report by S&P Global Market Intelligence.
In the recently published Public and Private Markets Outlook: Converging on Credit, part of the Big Picture 2025 Outlook Report Series by S&P Global Market Intelligence, analysts note that public debt markets have grown, but not at the expense of private markets, which currently represent $1.5 trillion and continue to expand rapidly.
“It may not be a coincidence that the decline in credit events in Credit Default Swaps (CDS) aligns with the growth in private credit provision. Many companies now have access to private credit lines at levels unseen in previous cycles. This trend is likely to persist into 2025, although it could raise questions about transparency and credit risk measurement in private credit funds, where exposure is ultimately transferred,” commented Gavan Nolan, Executive Director at S&P Global Market Intelligence.
The global private market, valued at $1.5 trillion, continues to see new activity as banks seek partnerships and fund managers aim to enter public markets through new investment vehicles.
Credit events in the CDS market have remained low, with only two credit event auctions—the CDS settlement mechanism—occurring in 2024. “This marks the fourth consecutive year with fewer than three auctions annually, reducing the three-year moving average to levels not seen since the credit bubble prior to the 2007-2008 global financial crisis,” the report states.
With the private credit market nearing $2 trillion in size, some regulators and investors are calling for more rules and transparency in this largely unregulated space.
Private credit markets are projected to continue their expansion, with some estimates suggesting that total assets under management could more than double by 2028, the report concludes.
For a copy of the report, contact press.mi@spglobal.com.
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