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Will Private Credit Maintain Its Momentum in 2026?

Moody’s 2026 outlooks indicate that corporate credit conditions will be stable across the board, supported by steady earnings, gradual deleveraging, and more predictable financing costs. 

Our latest installment in Moody’s 2026 Outlooks series covers Global Private Credit

Global Private Credit 2026 Outlook

Private credit’s expansion is set to continue in 2026 as global capital demand rises, and asset‑backed finance (ABF) becomes a main growth driver. While assets under management are projected to surpass $2 trillion next year and approach $4 trillion by 2030, the market’s composition is shifting rapidly from traditional corporate lending toward ABF, new asset pools, and broader regional participation across EMEA and APAC. Innovation remains central to meeting increasingly complex liquidity needs but also comes with risk. Limited regulatory guardrails, expanding retail participation, and growing interconnections with banks and insurers heighten the potential for stress transmission in a downturn.

Key Highlights

  • Growth accelerates, mix evolves: AUM is set to exceed $2 trillion in 2026, shifting from corporate lending toward ABF, with EMEA and APAC gaining momentum. Rising M&A and LBO activity increases competition but opens new funding opportunities.
  • ABF becomes the primary growth engine: Alternative asset managers are expanding origination channels and targeting more diverse assets, especially consumer loans and data‑infrastructure credit, amid constrained bank lending.
  • Securitization broadens across asset classes: Private credit’s role in ABS and other securitized products is growing, focused on higher‑yield sectors such as consumer lending, CRE, digital infrastructure, and equipment finance.
  • Innovation drives liquidity solutions: NAV lending, structured credit, rated fund structures, PIK features, and the rise of evergreen funds are reshaping liquidity provision while adding structural complexity.
  • Regulation supports growth but spotlights transparency: Regulators globally are enabling broader capital access, including potential retail participation, while increasing scrutiny of opaque structures and off‑balance‑sheet risks.
  • Interconnectivity heightens systemic risk: Ties between private credit funds, banks, and insurers in addition to growing retail involvement, raise the potential for contagion, volatility, and stress transmission during downturns.

From Outlook to Action: Get More from Moody’s Research Assistant

Moody’s Research Assistant is a GenAI platform designed to streamline access to Moody’s data and research, offering faster insights across geographies and sectors. It helps you analyze trends around growth resilience, policy divergence, trade dynamics, refinancing risks, and more. 

Below are tailored sample prompts to help you explore the most pressing themes from the Private Credit Outlook 2026: 

Prompt: “Summarize Moody’s recent research on private credit AUM growth projections through 2030 and identify the key drivers”

Why is this prompt important? Private credit AUM is set for explosive expansion—potentially nearing $4 trillion by 2030—driven by surging global financing needs, a structural shift toward asset‑backed lending, evolving regulatory frameworks that favor nonbank credit channels, and intensifying bank–private credit partnerships. Strong investor demand for higher-yielding, diversified exposures further accelerates this momentum, reinforcing private credit’s role as a core component of modern capital markets.

Why try this prompt? It captures the Moody's emphasis on long‑term AUM acceleration, highlights the structural and regulatory shifts reshaping the market, and reflects the strategic drivers—deal activity, ABF growth, bank collaboration, and investor appetite.

 

Prompt: “Summarize Moody’s views on forward‑flow agreements and the risks associated with indirect origination”

Why is this prompt important? Forward‑flow agreements are increasingly central for securing steady deal pipelines, but indirect origination heightens complexity, counterparty dependence, and liquidity risk.

Why try this prompt? It reflects Moody’s focus on structured deal flow, the growing role of asset‑backed channels, and the operational vulnerabilities introduced by multilayered origination networks.

 

Prompt: “What early‑warning indicators does Moody’s cite in BDC reporting that may signal asset quality deterioration?”

Why is this prompt important? Rising nonaccruals, shrinking asset‑coverage cushions, mounting realized and unrealized losses, and macro‑driven cash‑flow pressures all flag emerging BDC asset‑quality strain.

Why try this prompt? It reflects Moody’s emphasis on credit‑performance metrics, balance‑sheet cushions, and external economic pressures as leading signals of weakening portfolio health.

For more prompt ideas and detailed guidance, you can also visit our Research Assistant prompting hub.

As the global economic environment becomes more fragmented and complex, timely analysis and forward-looking perspectives are essential. Moody’s remains committed to providing the insight and tools you need to navigate uncertainty and seize new opportunities in 2026 and beyond. For more research, insights, and forecasts for the year ahead, explore the Outlooks hub.


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