Private Credit Markets See Record Issuance as Rates Stabilize

Private credit funds completed another bumper week of dealmaking Tuesday as direct lending issuance hit fresh records for 2025.

Over $25 billion in new loans were priced across leveraged buyouts, refinancings, and growth capital facilities. Borrowers took advantage of stabilizing rates and strong lender appetite.

“Spreads have compressed meaningfully since summer, and covenant packages are borrower-friendly again,” said one arranger at a major alternative asset manager.

The surge reflects growing acceptance of private credit as a permanent fixture in corporate finance. Traditional banks have retreated from certain segments, creating opportunity for non-bank lenders.

Dry powder in private credit vehicles exceeds $500 billion globally, supporting continued deployment. Returns remain attractive relative to public high-yield bonds.

Portfolio companies are using proceeds for add-on acquisitions and dividend recapitalizations. Technology and healthcare dominate sector allocation.

Regulators are monitoring leverage and valuation practices closely following recent high-profile stress cases. New guidelines on transparency and risk management are under discussion.

For investors, private credit offers illiquidity premium and downside protection through senior positioning. Institutional allocations continue rising.

The asset class appears poised for further growth as interest rates moderate and public markets remain selective.