Making Sense A deep dive into the world of investment-grade private credit
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Jun 13, 2025 Christian O’Donnell, Managing Director at J.P. Morgan, dives into the rapidly evolving world of investment-grade private credit. He highlights how this market differs from public credit, showcasing its unique benefits for corporations and the growing demand for capital. O’Donnell discusses tailored debt solutions, the critical role of financial institutions in navigating risks, and how the landscape is changing with more public investors entering the space. Expect insights into market dynamics and strategies for capital-intensive businesses.
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Defining Investment-Grade Private Credit
- Investment-grade private credit is a specialized subset of private credit focusing on rated investment-grade debt.
- These loans are customized, less liquid, and typically yield 20-40 basis points higher than public bonds.
Growth Drivers of Private IG Credit
- Private IG credit has grown due to massive capital needs and asset managers seeking excess returns.
- Customized, complex transactions offer borrowers flexibility and investors much higher yields than public bonds.
Examples of Private Credit Deals
- Popular private credit features include delayed draw, customized amortization, unique maturities, and embedded options.
- Examples include financing minority stakes, infrastructure projects, and securitized royalties or oil and gas assets.