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S&P Global Market Intelligence's New Outlook Report Shows the Convergence of Public and Private Credit Markets and Expects the Trend to Continue into 2025

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S&P Global Market Intelligence has released a report highlighting the convergence of public and private credit markets in 2024 and its expected continuation into 2025. The report reveals that while public debt markets have grown, the $1.5 trillion private markets continue rapid expansion. Key findings show that Credit Default Swap (CDS) credit events have remained low, with only two credit event auctions in 2024. The private credit market is projected to double by 2028, though regulators and investors are calling for increased oversight in this largely unregulated space. The report notes that companies now have unprecedented access to private credit sources, potentially affecting credit risk transparency.

S&P Global Market Intelligence ha pubblicato un rapporto che mette in evidenza la convergenza tra i mercati del credito pubblico e privato nel 2024 e la sua prevista continuazione nel 2025. Il rapporto rivela che, mentre i mercati del debito pubblico sono cresciuti, i mercati privati da 1,5 trilioni di dollari continuano a espandersi rapidamente. I risultati chiave mostrano che gli eventi di credito dei Credit Default Swap (CDS) sono rimasti bassi, con solo due aste di eventi di credito nel 2024. Si prevede che il mercato del credito privato raddoppi entro il 2028, sebbene le autorità di regolamentazione e gli investitori stiano richiedendo un maggiore controllo in questo spazio per lo più non regolamentato. Il rapporto osserva che le aziende ora hanno accesso senza precedenti a fonti di credito privato, il che potrebbe influenzare la trasparenza del rischio di credito.

S&P Global Market Intelligence ha publicado un informe destacando la convergencia de los mercados de crédito público y privado en 2024 y su esperada continuación en 2025. El informe revela que, aunque los mercados de deuda pública han crecido, los mercados privados de 1,5 billones de dólares continúan su rápida expansión. Los hallazgos clave muestran que los eventos de crédito de los Credit Default Swaps (CDS) se han mantenido bajos, con solo dos subastas de eventos de crédito en 2024. Se prevé que el mercado de crédito privado se duplique para 2028, aunque los reguladores y los inversores están pidiendo una mayor supervisión en este espacio en gran medida no regulado. El informe señala que las empresas ahora tienen acceso sin precedentes a fuentes de crédito privado, lo que podría afectar la transparencia del riesgo crediticio.

S&P Global Market Intelligence는 2024년 공공 및 민간 신용 시장의 융합과 2025년까지의 지속 예상에 대한 보고서를 발표했습니다. 이 보고서에 따르면 공공 채무 시장이 성장하고 있지만, 1.5조 달러 규모의 민간 시장은 빠른 확장을 계속하고 있습니다. 주요 발견 사항은 신용파생상품(CDS)의 신용 사건이 낮게 유지되고 있으며, 2024년에는 두 건의 신용 사건 경매만 있었던 것으로 나타났습니다. 민간 신용 시장은 2028년까지 두 배로 증가할 것으로 예상되지만, 규제 당국과 투자자들은 이 주로 규제되지 않는 분야에 대한 감독을 강화할 것을 요청하고 있습니다. 이 보고서는 기업들이 이제 민간 신용 출처에 전례 없는 접근을 하고 있으며, 이는 신용 위험 투명성에 영향을 미칠 수 있음을 지적합니다.

S&P Global Market Intelligence a publié un rapport soulignant la convergence des marchés de crédit public et privé en 2024 et sa poursuite prévue en 2025. Le rapport révèle que, bien que les marchés de la dette publique aient crû, les marchés privés de 1,5 trillion de dollars continuent d'expansion rapide. Les principales conclusions montrent que les événements de crédit des swaps de défaillance de crédit (CDS) sont restés faibles, avec seulement deux enchères d'événements de crédit en 2024. Le marché du crédit privé devrait doubler d'ici 2028, bien que les régulateurs et les investisseurs appellent à un renforcement de la surveillance dans cet espace largement non réglementé. Le rapport note que les entreprises ont maintenant un accès sans précédent aux sources de crédit privé, ce qui pourrait affecter la transparence du risque de crédit.

S&P Global Market Intelligence hat einen Bericht veröffentlicht, der die Konvergenz der öffentlichen und privaten Kreditmärkte im Jahr 2024 und deren voraussichtliche Fortsetzung bis 2025 hervorhebt. Der Bericht zeigt, dass während die öffentlichen Schuldenmärkte gewachsen sind, die 1,5 Billionen US-Dollar privaten Märkte weiterhin schnell expandieren. Wichtige Ergebnisse zeigen, dass die Kreditausfallereignisse (Credit Default Swap, CDS) niedrig geblieben sind, mit nur zwei Kreditausfallauktionen im Jahr 2024. Der private Kreditmarkt wird voraussichtlich bis 2028 doppelt so groß sein, obwohl Regulierungsbehörden und Investoren nach einer verstärkten Aufsicht in diesem weitgehend unregulierten Bereich fordern. Der Bericht stellt fest, dass Unternehmen nun ohne historischem Zugang zu privaten Kreditquellen verfügen, was möglicherweise die Transparenz des Kreditrisikos beeinflussen könnte.

Positive
  • Private credit market continues strong growth, currently at $1.5 trillion
  • Private credit assets under management expected to double by 2028
  • Low number of credit default events indicating market stability
Negative
  • Increasing regulatory scrutiny and calls for more oversight in private credit markets
  • Concerns about transparency and measurement of credit risk in private credit funds

Insights

The convergence of public and private credit markets marks a significant shift in the financial landscape. The $1.5 trillion private credit market's rapid expansion alongside public debt markets indicates a fundamental transformation in how companies access capital. The projected doubling of assets under management by 2028 suggests substantial growth opportunities.

The decline in CDS credit events to historic lows is particularly noteworthy, as it suggests private credit is providing a important financial buffer for companies. However, this also raises concerns about systemic risk assessment, as private credit markets lack the transparency of their public counterparts. The regulatory gap in this $2 trillion market could become a significant issue as the sector continues its explosive growth.

This trend has profound implications for market stability and investment opportunities, though the lack of transparency in private credit markets poses challenges for risk assessment and portfolio management.

The historically low CDS credit events, reaching levels not seen since pre-2008, warrant careful attention. While this might appear positive on the surface, it potentially masks underlying risks in the private credit sector. The shift of credit risk to less regulated private funds creates a potential blind spot in systemic risk assessment.

The regulatory scrutiny of this rapidly growing market is inevitable and necessary. Investors should prepare for increased oversight and potential market adjustments as transparency requirements evolve. The market's rapid expansion without corresponding regulatory framework improvements could create vulnerabilities similar to those that contributed to previous financial crises.

NEW YORK, Nov. 21, 2024 /PRNewswire/ -- S&P Global Market Intelligence has released a report today highlighting the convergence in public and private credit markets. The newly published Public and Private Markets Outlook: Converging on Credit is part of S&P Global Market Intelligence's Big Picture 2025 Outlook Report Series.

In this new report, S&P Global Market Intelligence's capital markets analysts highlight how public and private credit markets have become increasingly intertwined in 2024, and why we expect this trend to continue in 2025. Public debt markets have grown, but not at the expense of the $1.5 trillion private markets, which continue their rapid expansion.

"It may be no coincidence that the fall in Credit Default Swap (CDS) credit events aligns with the growth in provision of private credit. Many companies now have recourse to lines of credit from private sources to an extent not seen in previous cycles. This trend is likely to continue in 2025 but may raise questions about the transparency and measurement of credit risk in private credit funds, where the exposure is ultimately shifted," said Gavan Nolan, Executive Director at S&P Global Market Intelligence.

Key highlights from the report include:

  • The $1.5 trillion global private market continues to see new activity as banks seek out new partnerships. Meanwhile, fund managers are trying to enter public markets through new investment vehicles.
  • Credit events in the CDS market have stayed low, with just two credit event auctions — the settlement mechanism for CDS — in 2024. This is the fourth consecutive year that auctions have not exceeded three annually and brings the 3-year moving average down to the lowest levels not seen since the credit bubble before the global financial crisis in 2007-2008.
  • With the size of the private credit market approaching $2 trillion, some regulators and investors are calling for more rules and transparency in the largely unregulated space.
  • The private credit market, meanwhile, is only growing, with some estimates calling for total assets under management to more than double by 2028.

To request a copy of Public and Private Markets Outlook: Converging on Credit, please contact press.mi@spglobal.com.

S&P Global Market Intelligence's opinions, quotes, and credit-related and other analyses are statements of opinion as of the date they are expressed and not statements of fact or recommendation to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security.

About S&P Global Market Intelligence 
At S&P Global Market Intelligence, we understand the importance of accurate, deep and insightful information. Our team of experts delivers unrivaled insights and leading data and technology solutions, partnering with customers to expand their perspective, operate with confidence, and make decisions with conviction.

S&P Global Market Intelligence is a division of S&P Global (NYSE: SPGI). S&P Global is the world's foremost provider of credit ratings, benchmarks, analytics and workflow solutions in the global capital, commodity and automotive markets. With every one of our offerings, we help many of the world's leading organizations navigate the economic landscape so they can plan for tomorrow, today. For more information, visit www.spglobal.com/marketintelligence.

Media Contact
Amanda Oey
S&P Global Market Intelligence 
+1 212-438-1904 
amanda.oey@spglobal.com or press.mi@spglobal.com

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SOURCE S&P Global Market Intelligence

FAQ

What is the current size of the global private credit market according to S&P Global (SPGI)?

According to S&P Global Market Intelligence's report, the global private credit market is currently at $1.5 trillion.

How many CDS credit event auctions occurred in 2024 according to S&P Global (SPGI)?

According to the report, there were only two credit event auctions in 2024.

What is the projected growth for private credit assets under management by 2028?

According to the report, private credit assets under management are expected to more than double by 2028.

What are the main concerns regarding private credit markets highlighted in S&P Global's (SPGI) 2025 outlook?

The main concerns highlighted are the need for more rules and transparency in the largely unregulated private credit space, and questions about credit risk measurement in private credit funds.

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