Private credit is an asset defined by non-bank lending where the debt is not issued or traded on the public markets.
[4] Direct lending market expanded rapidly in the wake of the 2008 financial crises when the SEC tightened restrictions and capital requirements on public banks.
As banks decreased their lending activity, nonbank lenders took their place to address the continued demand for debt financing from corporate borrowers.
[8] At the same time, supply increased as companies turned to non-bank lenders after the 2007–2008 financial crisis due to stricter lending requirements.
[10] One recent trend has been the rise of covenant-lite loans (which is also an issue for publicly traded investment grade and high yield debt).