private credit

Private credit refers to loans made directly to companies by nonbank investors such as asset managers and dedicated funds, and to the market for those loans. Unlike publicly traded bonds, the terms are negotiated privately between borrower and lender, and the loans serve as an alternative to bank financing.

Borrowers are often midsize companies and businesses owned by private equity firms. Whereas private equity invests in company ownership, private credit earns returns from the interest and principal on loans.

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