The Credit Edge by Bloomberg Intelligence Blackstone Says Private Credit Pays a Lot Better Than Liquid Debt Markets
Sep 18, 2025
Michael Zawadzki, Chief Investment Officer of Blackstone Credit & Insurance, shares insights on the allure of private credit, highlighting its 150-200 basis points premium over traditional debt markets. He explains why speed and value are attracting borrowers to direct lenders and the growing interest from insurers in long-duration private investments. The conversation also touches on the potential in data center financing, the competitive landscape of managers, and the anticipated rise in mergers and acquisitions as the market evolves.
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Private Credit Offers Clear Spread Premium
- Blackstone sees 150–200 bps of excess spread in private credit versus liquid markets across IG and HY.
- That premium stems from bringing capital direct to borrowers and reducing syndication leakage.
Match Assets And Liabilities Carefully
- Match assets and liabilities to manage liquidity risk in private credit funds and favor unlevered or low-levered vehicles.
- Use structures without cross-collateralization to preserve resilience and prudent risk management.
Farm-To-Borrower Model Creates Value
- Direct lending yields a premium because managers deliver customized, scale capital straight to borrowers, avoiding market fees.
- Borrowers receive tailored certainty and speed that public markets can't always provide.