Private Debt Markets

The chapter provides an overview of private debt and private debt markets. It explains the array of different specific types of private debt investments that are observed in practice, and the role equity incentives play in private debt deals. The chapter examines evidence from different countries around the world, including developed and developing markets. The chapter also describes the motives and contexts for using private debt, including but not limited to transactions involving private placements, syndicated loans, and direct lending. Private debt is not restricted to private companies but includes public ones as well. Further, the chapter characterizes private debt investors and their evolution over time. Additionally, it reviews evidence on the returns that private debt investors enjoy. The chapter concludes by identifying gaps in existing knowledge of private debt and offering suggestions for future research.