Private credit is set for a boom on the back of low defaults, limited refinancing activity and the absence of a recession, providing the potential for unprecedented debt returns, according to a report by Bloomberg.
The report quotes Benoît Durteste, Chief Executive Officer of Intermediate Capital Group as saying in an interview with Bloomberg at this week’s IPEM private equity conference in Paris, that: “It’s double-digit returns for senior debt right now — I’ve never seen that in my career”.
And he contests a prediction by UBS Group AG strategists back in June that defaults in the private credit market would peak at between 9% and 10% in the first half of 2024.
“Not at all. There’s no history of that, there’s no experience of that, he said, adding that the average default rate is 2% or lower, and without a severe recession, debt portfolios wouldn’t be so impacted.
