In this article I cover how recent private credit syndications show the loan market can move very fast from a market maker only model to an all to all trading and potentially even dark pool trading. This requires high quality data to enable buyer to take risk from known counterparties with guaranteed delivery of product.
Private credit deals are demonstrating the ability of the market to adopt an all to all model quickly
Oxymoron right ? Well not really. Old school Private Credit was all bilateral. Covid changed that for good. 2023 has seen a further evolution of the mega underwrite. Those with large underwriting capabilities can underwrite and distribute like banks do.
Consider the largest deal of the year a $5bn deal done for Finastra underwritten by 3 titans of the private credit world. This deal was then syndicated out to over 25 funds making it essentially a syndicated term loan. To get this done all the firms facing off against each other would have to go through a full KYC process on each other.
So if funds are sharing risk at Primary what is to stop this in Secondary markets? This is the start of a new kind of liquidity in loan markets that can be enabled by platforms that have the ability to process both KYC and data trade data.
To read more about how our KYC social network operates click here
With customisable Counterparty KYC lists by manager and fund, we are able to see the genesis of the market to Flash Boys style of dark pool trading in loans that increases liquidity and preserves anonymity. The future is not bright its dark pools………