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Chart of the week

Private credit helps dampen market volatility

Private credit has seen significantly lower monthly spread volatility than either high yield bonds or senior secured loans.

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May 2, 2025 | 2 minute read

Monthly change in credit spreads: Public vs. private credit

Line chart showing monthly changes in spreads for private credit, senior secured loans and high yield bonds since April 2021. Private credit’s largest single-month change in credit spreads was 22 basis points compared to 97 basis points for senior secured loans and seven swings of 100-plus -250 -200 -150 -100 -50 0 50 100 150 200 250 Monthly change in credit spreads: Public vs private credit Senior secured loans High yield bonds Private credit Basis points basis points for high yield bonds over the same period, highlighting private credit’s lower volatility profile especially during periods of market turbulence.

Source: KBRA DLD as of March 31, 2025, latest data available. High yield bonds represented by the BofAML U.S. High Yield Master II Index, as of April 30, 2025. Senior secured loans represented by the Morningstar LSTA US Leveraged Loan Index, as of April 25, 2025, latest data available.

  • Public markets have borne the brunt of the extreme swings in market sentiment since President Trump’s April 2 tariff announcement.
  • The S&P 500 experienced daily moves of 1% or more on nearly half of April’s trading days, while high yield bonds and broadly syndicated loans experienced similar intra-month volatility.
  • In contrast, private credit valuations are not subject to the daily swings in market fear or euphoria. Since April 2021, private credit’s largest single-month change in credit spreads was 22bps compared to 97bps for senior secured loans, and seven swings of 100-plus bps for high yield bonds over the same period.1
  • Private credit’s lower volatility profile may be especially valuable during periods of market turbulence.

  • KBRA DLD as of March 31, 2025, latest data available. High yield bonds represented by the BofAML U.S. High Yield Master II
    Index, as of April 30, 2025. Senior secured loans represented by the Morningstar LSTA US Leveraged Loan Index, as of April 25, 2025, latest data available.

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