Private equity and alternative credit giants, including Blackstone, Apollo Global Management, Golub Capital, and Ares, are selling bonds backed by private credit loans at the fastest pace on record, according to a report by Bloomberg.
The sale reflect soaring investor demand and the continued growth of the private credit market.
These securities, known as private credit collateralised loan obligations (CLOs), bundle loans originated by private credit funds to middle-market companies, rather than the traditional bank-originated broadly syndicated loans (BSLs). Private equity managers are increasingly securitising these loans to generate liquidity, meet investor appetite for yield, and enhance fee income.
So far in 2025, around $30bn of private credit CLOs have been issued, already surpassing last year’s volume at this stage. Bank of America estimates the market could reach an all-time high of $50bn by year-end, up more than 25% on the previous record. Over the next two to three years, private credit CLOs are expected to account for 25% of the overall $1.7tn private credit market, up from 18% in 2024.
For private equity managers, CLO issuance allows firms to recycle capital, support portfolio company financing, and meet LP demand for structured credit exposure.
The largest new deals this year have exceeded $1bn each, illustrating the scale and ambition of private credit managers in the securitisation market. Investors are drawn to private credit CLOs for higher yields and enhanced credit protection, though the instruments remain less liquid and transparent than traditional CLOs.
