Liquidity in public and private credit is “converging”, according to new data from Apollo.
“The chart below shows quoted bid-ask spreads for public investment grade credit as a function of bond-level spread volatility,” said Apollo’s chief economist, Torsten Sløk.
Read more: Private credit delivering attractive returns despite uncertain markets
Read more: Private credit’s consolidation season
“Both on-the-run and off-the-run bonds see higher transaction costs as spreads move, but the increase is far more pronounced for off-the-run bonds. This helps to explain why volumes remain depressed even in volatile periods,” he added.
“The bottom line is that liquidity in public and private credit is converging, and in some cases where private credit is included in exchange-traded funds (ETFs), private credit may even be more liquid than some segments of public credit.”
Read more: Private credit market competition leading to need to ‘limit call protection’
