Most commentary on private credit talks about the asset class in the abstract. This monitor does the opposite. Its single purpose is to record, on a recurring basis, what capital actually costs across Asia Pacific private credit: the margin a borrower pays over the base rate, the leverage a lender will advance against earnings, and the all in yield that results. We publish the readings with their sources and their as of dates so that any figure here can be checked.
A word on method, because it matters for how much weight to give each number. Brenton does not run a proprietary survey of lenders. The figures below are drawn from public and published sources, principally the Australian Securities and Investments Commission, EY Parthenon, the Reserve Bank of Australia, Chambers and Partners, the S&P Lincoln Senior Debt Index, and manager commentary that we have flagged where we rely on it. What Brenton adds is the reading: the judgement about what the numbers mean for anyone raising or deploying capital in the region.
What this monitor tracks, and why
Private credit is not one thing. Senior direct lending, unitranche, subordinated and mezzanine debt, and asset backed finance all sit under the label and price very differently. Where a figure applies to a specific segment, we say so. The monitor concentrates on senior and unitranche lending to mid market corporate borrowers, because that is the segment where Brenton's clients most often raise capital and where public pricing signals are clearest.
We track four readings each quarter: market size and the direction of flows, the senior margin over the base rate, the all in yield, and the leverage lenders will advance. Over time the value of a monitor is in the series, not any single quarter. A margin of 600 basis points means little on its own. A margin of 600 basis points when the comparable figure a year earlier was 650, and when offshore markets sit 200 basis points tighter, tells you something about where the region is in its cycle.
The size of the market
Asia Pacific remains a small share of global private credit, but it is growing faster than any other region. Chambers and Partners and IFM Investors both place the regional market at about US$59 billion in 2024, with growth to roughly US$92 billion by 2027, an increase of close to 46% over three years. Allianz Global Investors uses a broader definition and a higher figure of about US$120 billion, which is a useful reminder that the headline depends heavily on what is counted.
Within the region the weight sits in Australia. EY Parthenon's March 2026 overview estimates the Australian private debt market at about A$234.5 billion in 2025, with the number of private credit funds roughly tripling since 2017 and offshore managers now accounting for close to 32% of the market. Chambers gives a slightly lower figure of about A$224 billion and a compound growth rate near 20%. India is smaller but accelerating from a low base: Chambers estimates Indian assets under management at about US$17.8 billion in 2023, up from under US$1 billion in 2010, and deployment in the first half of 2025 reached about US$9.0 billion across 79 deals.
Sources: EY Parthenon, Annual Australian Private Debt Market Overview, March 2026 (Australia, A$); Chambers and Partners, Private Credit 2026, Asia Pacific and IFM Investors (APAC, US$); Chambers and Partners (India, US$). Bars scale each series against the largest value shown and mix currencies, so they indicate relative size only and are not directly comparable across currencies.
Spreads and all in yields
The defining feature of Asia Pacific pricing is that it has not compressed the way developed markets have. In the United States and Europe, a decade of capital inflows narrowed direct lending margins materially. The S&P Lincoln Senior Debt Index implies United States direct lending yields of about 9.5% as at the fourth quarter of 2025, down from a peak near 11.8% in the third quarter of 2023, as falling base rates and competition did their work.
Australia has moved far less. FC Capital, a local manager whose figures we treat as indicative rather than independently audited, places single B rated mid market bank loans at roughly BBSW plus 500 to 800 basis points, against about 350 to 450 basis points in the United States or Europe, and puts senior private loans to middle market borrowers at yields of about 10 to 13%, with a typical credit margin of 8 to 10% over the cash rate. The Reserve Bank of Australia's February 2026 bulletin provides an independent check in the same direction: it reports that business lending margins have narrowed by only about 10 to 30 basis points since 2023, a far gentler move than offshore. The structural reason is a smaller lender base and fewer refinancing alternatives for borrowers, which together preserve pricing power for the lender.
Source: FC Capital, The Opportunity for Middle Market Private Credit Lending in Australia, January 2026. Figures are a manager's indicative estimates, not an audited index, and bars scale to the top of each stated range. Base rates differ by market (BBSW in Australia, SOFR or EURIBOR offshore), so the margins are comparable but the all in yields are not.
Leverage and structure
Pricing is only half of a lending decision. The other half is how much a lender will advance against a borrower's earnings. Here the Asia Pacific picture, and Australia in particular, looks conservative. ASIC's September 2025 report on private credit in Australia found that leverage in local structures tends to sit around 0.5 to 2.0 times debt to earnings, lower than in the United States, where sponsored mid market unitranche deals routinely carry several times that. ASIC expects Australian leverage to rise over time as the market matures.
Lower leverage at a wider margin is an unusual and, for a lender, attractive combination. It means the local market is paying more for less risk than its offshore equivalents, at least on these two measures. The usual caution applies. Leverage multiples say nothing about the quality of the underlying earnings, the strength of covenants, or the discipline of a given manager, and ASIC's report was in part a warning about valuation and disclosure practices across the sector. The headline readings are encouraging. They are not a substitute for underwriting.
What the readings mean
Put the three readings together and a consistent picture emerges. Asia Pacific private credit is earlier in its cycle than the United States or Europe. It is smaller, it is growing faster, it pays a wider margin, and it advances less leverage. For a lender or an allocator, that is a favourable setup, provided the capital is deployed with the underwriting discipline that the wide margins are compensating for. For a borrower, it is a reminder that the cost of private capital in the region carries a genuine premium over a listed or syndicated alternative, and that the premium is the price of speed, certainty and flexibility.
We regard the current combination of wide margins and low leverage in Australia as a mid cycle condition rather than a permanent feature. The same capital inflows that compressed United States and European pricing over the past decade are now arriving in the region, and offshore managers already account for close to a third of the Australian market. On balance we would expect margins to hold firmer here than they did offshore, because the structural scarcity of lenders is real, but we would not underwrite on the assumption that today's spreads are durable. This reading would be revised if offshore fundraising into the region accelerated sharply or if a domestic credit event forced a repricing of risk.
A margin is a number anyone can quote. What it is worth depends on the leverage behind it and the discipline underwriting it. The purpose of this monitor is to keep both in view, quarter after quarter.
This article is produced by Brenton Financial Research for informational and educational purposes only. It does not constitute financial, investment, legal, or tax advice. Figures are drawn from the public and third party sources cited and carry the as of dates shown; where a source is a manager's own commentary rather than an independent index, this is noted. The views expressed reflect the research team's analysis and should not be relied upon as the basis for any investment decision. Brenton Financial Pty Ltd (ABN 21 696 298 227). Past performance is not indicative of future results.
Sources and methodology
- EY Parthenon, Annual Australian Private Debt Market Overview, March 2026.
- Australian Securities and Investments Commission, Report 814, Private credit in Australia, September 2025.
- Chambers and Partners, Private Credit 2026, Asia Pacific Wide, Trends and Developments.
- IFM Investors, Why APAC Private Credit, March 2026, and Allianz Global Investors, Asia Private Credit.
- Reserve Bank of Australia, Recent Changes in Credit Markets and Their Implications for Monetary Policy, Bulletin, February 2026.
- S&P Dow Jones Indices and Lincoln International, S&P Lincoln Senior Debt Index Series.
- FC Capital, The Opportunity for Middle Market Private Credit Lending in Australia, January 2026 (manager commentary, indicative figures).
