What's the matter with Private Credit?

... my friend asked. Well I'm no expert, but this is what I told them.

PC is basically "more negotiable debt", than bonds which are regulated as securities. The original intent is for, of course, relationships among premium people to translate to premium alpha. 

The nature of debt markets is that macro has a bigger effect on everyone. Because the bag holders are skewed towards the conservative personalities, it is always doom and gloom : pessimistic motivation to invest + pessimistic reaction to news + pessimistic appreciation of macro 75% of the time.

BTW they have PC-backed CDOs now ( bags of PC that are securitised and resold ). CDOs for residential mortagages being the Lehman issue <- for reference.

My current understanding, superficially : banks are not under significant pressure, so the debt market in general is well buffered. 2-3 years ago the SVB and related stress issues were very well contained. So while US mortgage market is currently stressed, individuals suffer but there is "unconcerning" systemic risk. Some big players to watch may be the % of residential mortgages held by non-individuals.  The reason we talk about the US debt markets so much, is because the backstop is the US banking system.

A side issue of interest is the whole Trumpian stablecoin regulation : attempting to tie cryptocurrency innovation to USD by requiring US-domiciled stablecoin issuers to hold USTs as collateral. What this does simply is make USTs more exposed to volatiity in crypto. Of interest to credit analysis, is that fact that stablecoin-cos do report their collateral, but it's generally not audited with great reification : case in point USDT-co.

🤡tq for coming to my ted grumble.