Private credit refers to non-bank lending, in the private market to companies in the form of bonds, loans, or structured private credit funds allowing investors in these bonds, loans and structured credit funds to gain a yield above risk-free rates and investors’ cost of capital.
The growing need for bespoke financing solutions is driving an increased interest in private credit, says Serene Chen, APAC head of credit, currency and emerging market sales at JP Morgan.
Chen was speaking at a media roundtable on private credit trends on June 5. As interest rates such as the Singapore overnight rate average (SORA), the Hong Kong interbank offered rate (HIBOR) and the secured overnight financing rate (SOFR) continue to decline, and risk-free rates settle at more than 100 basis points below 10-year US Treasury yields, institutional and high net worth investors are likely to be attracted to private credit.
