The virtues of private debt in a rising rate environment

While interest rates have stayed at historically low levels for more than a decade, over the past few months they’ve experienced some upward pressure. And while that means that bonds have fallen since their price is inversely related to yields, it’s worth pointing out that private debt hasn’t lost value in the same way. That’s because credit risk plays a larger role in determining the value of private debt than it does in many traditional bonds. Plus, private debt is extended for shorter terms.

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