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Traditional Safe-haven Bonds Market Tumble Gives Rise To Private Credit Market – Financial Services



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While borrowers continue to suffer from the rates hike from the
beginning of the year, with the rising inflationary concerns,
investment-grade and the government bonds market has not faired
well either.

Across the financial products spectrum, bonds have always been
the stable and safer option for investors across the globe,
typically, when there are high volatilities in the equities market,
investors have a higher tendency to switch gear into bonds which
offer a stable return.

Nevertheless, with the continuous rates hike expected across the
globe, participating in the public capital markets becomes
difficult from both a the borrower and investor standpoint.

The private credit market may offer a new channel for market
participants to explore. With a good number of real estate
high-yield developers going into either liquidity or credit crisis,
it gives another boost or reason for regional participants to take
a closer look into the private credit space.

The views expressed herein are those of the author(s) and
not necessarily the views of FTI Consulting, Inc., its management,
its subsidiaries, its affiliates, or its other
professionals.

FTI Consulting, Inc., including its subsidiaries and
affiliates, is a consulting firm and is not a certified public
accounting firm or a law firm.

Under pressure from central bankers determined to quash
inflation even at the cost of a recession, global bonds slumped
into their first bear market in a generation. The Bloomberg Global
Aggregate Total Return Index of government and investment-grade
corporate bonds has fallen more than 20% from its 2021 peak on an
unhedged basis, the biggest drawdown since its inception in
1990.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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