Credit Risk Hastens To The Shadows In New US Regime

By James Crombie, Bloomberg Markets Live reporter and strategist

Credit’s big shift to private markets is poised to accelerate under the next US administration. That will keep public bond and loan supply tight, distort traditional measures of corporate stress and push debt risk deeper into the shadows.

Private credit’s jog to $1.6 trillion happened with surprising speed and the run to $40 trillion by piling on asset-based finance is expected to be swifter. The likely volatility, buyout boom, inflation, economic uncertainty and lax regulation expected from a second Trump administration hastens the move, with significant implications for corporate debt pricing — and distress.