Private Debt Helps Keep Lid on Corporate Defaults, Says Muzinich

The rapid growth of private credit has helped rein in delinquencies and fostered stronger acceptance among bondholders for debt extensions over restructurings, according to investment firm Muzinich & Co.

“The bond market generally has become the market that is taking less risk,” Tatjana Greil Castro, the New York-based company’s co-head of public markets wrote in emailed comments to Bloomberg. Private credit’s expansion has prompted the public debt market to start to “entertain amend and extend structures rather than pushing companies into restructurings.”

Private credit, which involves investment funds bypassing banks and lending directly to companies, has grown in ...