UBS Private Credit Market Outlook

UBS Private Credit Market Outlook confirms kennek's vision.

UBS's latest outlook on private credit highlights key points despite the challenges posed by an inverted yield curve, tighter lending standards, and higher interest costs:

Supportive Conditions Ahead: Above-trend growth, declining inflation, and easing monetary policy are expected to support risk assets moving forward

• Attractive Yields: The increase in interest rates has pushed private credit yields over 10%, offering strong potential for future returns

• Low Default Rates: Private credit defaults continue to stay below those of high-yield bonds and leveraged loans, indicating that experienced private debt managers are effectively managing through high rate and volatile markets

• Bank Involvement: Banks have modestly reentered the funding space in 2024, with USD 13 billion moving from direct lending to the BSL market year-to-date, but the impact on private credit is minimal

At kennek we help private lenders navigate these market dynamics efficiently, leveraging the latest tech tools to manage operations seamlessly