Blackstone Inc has priced a nearly $1bn private credit collateralised loan obligation (CLO) at one of the tightest spreads seen this year, highlighting sustained investor appetite despite broader caution in the direct lending market, according to a report by Bloomberg.
The AAA tranche of the vehicle priced at 137 basis points over a floating-rate benchmark, slightly tighter than the year-to-date average of 140 basis points and well below the 153 basis points seen in 2025 and 180 basis points in 2024, according to Bank of America data.
The deal underscores growing investor demand for high-quality, diversified private credit portfolios managed by established firms, Blackstone said. “
Blackstone and other managers have increasingly packaged private credit loans into CLOs to meet investor demand as spreads tighten across corporate debt markets. The move comes amid investor concern over potential risks in private credit, particularly exposures to software companies that may face disruption from artificial intelligence. Barclays recently estimated that software makes up around 20% of private credit portfolios, heightening sensitivity to sector-specific shocks.
