Since the Global Financial Crisis, private credit has reshaped the credit markets.

The tighter bank regulations implemented after the GFC were designed to de-risk the financial system. But they also constrained banks’ ability to lend.

Private credit stepped in to fill the gap, which permanently shifted lending activity away from banks.

The shift has been most visible in leveraged finance.

Historically, investment banks dominated this space by underwriting and syndicating LBO debt to public investors through the Broadly Syndicated Loan (“BSL”) market.

But private credit has disrupted this model, winning mandates through faster execution and an appetite for complex and higher-risk credits.

Private credit shines during periods of uncertainty.

In the volatile markets of 2022 and 2023, private lenders were able to act aggressively while public markets were frozen, allowing them to capture significant market share.

But the pendulum is shifting back. Since 2024, public markets have roared back to life. The BSL market is no longer on the sidelines; it is aggressively competing for, and winning, mandates that had migrated to private credit.

The public market’s advantages are straightforward: pricing and scale.

Broadly syndicated loans are typically 100–200 bps cheaper than comparable direct loans and can accommodate larger deal sizes.

As a result, borrowers have increasingly refinanced expensive private credit with cheaper public market debt. 2024 and 2025 were clear inflection points, with private credit to BSL refinancings surging after years of predominantly private credit activity.

As the competition continues, the boundaries between the two markets are blurring.

Borrowers are increasingly running dual-track capital raises. Banks are offering both public and private solutions, including in-house direct lending platforms. Even public, investment grade companies are tapping private debt markets.

The competition is forcing both products to evolve: private credit is moving up into the investment grade and more liquid products, while the BSL market is adopting more aggressive and flexible structures to compete with private lenders.

The result is a deeper, more dynamic credit market. In 2026, borrowers no longer need to choose between public and private, but can combine both to tailor an optimal solution.

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