Moody’s Says Private Credit Returns Will Be Pressured by Banks
- Public refinancings can save companies up to 300 basis points
- Growth of private credit could draw more regulatory scrutiny
A recent slew of private deals that have been refinanced into the public markets suggest a hunger among borrowers for interest savings.
Photographer: Michael Nagle/BloombergPrivate credit’s “golden era” may face strain amid a resurgence in the broadly syndicated loan market, as increased competition drives down returns, according to a report from Moody’s Investors Service.
As banks compete harder to win big deals, recent private credit loans have priced at some of the tightest spreads on record, according to data compiled by Bloomberg. Last month, a $3.3 billion private credit loan for UK insurance broker Ardonagh Group Ltd. came in at 475 basis points over a US reference rate, and Blackstone Inc. recently sought a $250 million loan with similar pricing to finance its planned purchase of Rover Group.