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Chart of the week

Private credit is a small fraction of the U.S. credit market

In contrast to the headlines, the primary story in private credit is the change in market share, not the change in market size.

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December 6, 2024 | 2 minute read

U.S. corporate credit market by size

Column chart showing major corporate credit markets by size. The chart highlights how small the private credit market remains, despite it accounting for outsized press over the past year. Private credit represents approximately $1.25 trillion in the U.S. and $2 trillion globally, which represents a fraction of the investment grade ($9 trillion) and bank loan ($11 trillion) markets.

Source: Pitchbook, BofAML, Bloomberg Finance, L.P., U.S. Federal Reserve, as of June 30, 2024.

  • Private credit has been featured in financial press headlines for much of the past year as significant growth leads some market participants to be concerned that it represents a bubble.
  • Private credit has indeed seen massive growth, roughly doubling in size over the past five years to approximately $1.25 trillion in the U.S. and $2 trillion globally.1
  • But private credit remains a relatively small market, especially when compared to other sources of capital for businesses. It is smaller than the leveraged credit markets (high yield bonds plus leveraged loans, which together represent approximately $2.8 trillion). It also remains a fraction of the investment-grade bond and bank loan markets, which remain many firms’ primary sources of debt capital.
  • As discussed in our research paper, “Is private credit a bubble?”, private credit assets under management have grown alongside a restrained banking sector, strong demand for financing and the increasing preference from borrowers for private lenders (due to their ability to offer execution certainty and tailor-made terms, among other considerations).
  • With this in mind, the primary story in the private credit market today is the change in market share—not the change in market size.

  • Pitchbook, as of June 30, 2024, latest data available.

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