Private Credit

Loans provided by a non-bank lender directly to a borrower. Private debt is often issued to companies with little to no access to traditional sources of financing such as banks or the public markets. This type of loan is also known as a direct lending transaction.

Private debt is not publicly issued or traded, typically unrated, tends to be senior in repayment priority (first or second lien), is typically secured by collateral, and often carries floating rate coupons. In contrast, public debt is publicly traded, often rated by a credit rating agency, has fixed coupons and is usually unsecured. In addition, because these agreements are generally negotiated directly between borrower and lender, privately originated loans can often be executed more efficiently with greater certainty and speed than is typically the case with banks or in public markets.