Volatility is taking a toll on credit growth and quality, which faces increasing risks
For this agency, it is necessary for the market to adjust to uncertainty. Photo: Courtesy - Moody's
TL;DR
- Increasing volatility is negatively affecting private credit's growth and asset quality.
- Liquidity is a major concern, with investors requesting withdrawals from illiquid assets.
- There are signs of deteriorating credit quality and increased refinancing risk, especially in tech and software.
- Private credit's growing exposure to the financial system is leading to increased regulatory and investor scrutiny.
- Despite challenges, private credit growth is expected to continue in sectors like infrastructure and energy transition, albeit under greater scrutiny.