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Private Credit on Regulatory Radar

May 12, 2026

Authorities are seeking better visibility into the private credit markets, now estimated at $1.5 to $2 trillion, particularly where life insurers are involved. Private credit is generally defined as loans originated by nonbanks and negotiated on a bilateral basis between borrowers and lenders.

Why it matters: Private credit has become a meaningful source of financing for mid-sized companies and, increasingly, larger borrowers and AI infrastructure projects. Regulators and policymakers are assessing whether insurers' shift toward private credit introduces opaque risks that could affect policyholders or trigger rapid asset sales.

Driving the news

• The FSB: The global body coordinating financial regulation released a report on May 6 examining the private-credit ecosystem, bank interlinkages, borrower credit quality, and data gaps. The report notes that the sector can support economic activity by offering alternative credit solutions to borrowers, but remains untested to a prolonged economic downturn.
• Treasury: On May 7, Treasury Secretary Scott Bessent met with state insurance commissioners and the National Association of Insurance Commissioners (NAIC) to discuss recent developments in private credit markets.
• Federal Reserve: On May 8, the U.S. central bank released its biannual Financial Stability Report. It noted strong household balance sheets and well-capitalized banks. However, “a wide range of market contacts who participated in the Survey of Salient Risks in March and April most frequently cited geopolitical risks, oil shocks, risks from artificial intelligence (AI), private credit, and persistent inflation.”
  • The report added the following new sections: “Updates in the Classification of Nonbank Financial Institutions” and “Developments in Private Credit.”
  • Survey respondents viewed private credit as:

Market Size and Composition

• The FSB estimates the global private-credit market to be $1.5 trillion –$2 trillion as of year-end 2024, with the United States having the largest market, with an estimated size of around $1 trillion. 
  • Bank exposure to private credit funds is a relatively small share of banks' total assets and capital, with member data capturing about $220 billion in drawn and undrawn credit lines. However, other estimates suggest the amounts could be more than twice as large.
  • Private equity-backed insurers in the U.S. now control nearly $900 billion in insurance liabilities, a significant rise from $67 billion in 2012.
• Private credit’s growth, according to the FSB, has been driven by the increased demand for high-yield and tailored credit due to:
  • Prolonged low-interest rate environment;
  • Changes in post-crisis bank regulation; and 
  • Expansion of private equity.

Regulators are focused increasingly on transparency, particularly as it relates to private credit in the insurance sector. 

• The FSB found that borrowers that are predominantly in private credit typically lack public ratings, and that valuations are often conducted less frequently and may involve significant discretion. 
• According to American Banker, Secretary Bessent said Treasury is monitoring the growing exposure of insurers to private credit to ensure that state-based oversight remains effective. 
• State regulators also shared their efforts to monitor private credit and protect policyholders. Elizabeth Dwyer, director of Rhode Island's Department of Business Regulation Director and NAIC president-elect, stated in a press release:

What's next 

• The FSB outlined four follow-up work areas:
  • Continuing to assess vulnerabilities related to interlinkages between a range of nonbanks within the private finance ecosystem;
  • Mapping the components of the complex and evolving ecosystem;
  • Facilitating supervisory discussions to enhance authorities’ ability to assess and supervise vulnerabilities and risks; and 
  • Addressing data challenges that make it difficult to monitor vulnerabilities. 
• On the insurance side, NAIC adopted a challenge process to so-called private letter ratings, which are confidential credit opinions issued by rating agencies for privately-placed securities. 
  • According to American Banker, this challenge process is the culmination of a multi-year effort that would allow the NAIC to challenge any rating. 
  • NAIC has a team of 30 analysts that review individual transactions to ensure compliance with regulatory standards. No rating challenges have been processed to date. 
  • A rating challenge would have to be a "material," requiring a three-notch downgrade or more for regulators to determine if a rating needs to be changed.

Please contact Sairah Burki (sburki@crefc.org) with questions.

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CRE Securitized Debt Update

September 30, 2025

Private-Label CMBS and CRE CLOs

1. ESA 2025-ESH, a $1.9 billion SASB backed by a floating-rate, five-year loan (at full extension) for a joint venture between Blackstone and Starwood to refinance a portfolio of 220 extended-stay hotels operated by Extended Stay America, Inc., totaling 24,560 rooms across 33 states.
2. BSPRT 2025-FL12, a $1.1 billion CRE CLO sponsored by Benefit Street Partners. The managed transaction comprises 44 loans secured by 73 properties. The pool’s top three property types are multifamily (61.8%), hotel (22.3%), and industrial (12.1%).
3. BANK5 2025-5YR17, a $1 billion conduit backed by 44 five-year loans secured by 66 properties from JPMorgan, Morgan Stanley, Wells, and BofA.
4. NRTH 2025-PARK, a $900 million SASB backed by a floating-rate, five-year loan (at full extension) for NorthPark Management to refinance the 1.9 million square foot NorthPark Center super-regional mall in Dallas.
5. BMO 2025-C13, an $814.2 million conduit backed by 47 10-year loans secured by 89 properties from BMO, Deutsche, Key, Citi, Goldman, JPMorgan, Zions, Benefit Street, LMF, Starwood, and Greystone.
6. WFCM 2025-5C6, a $622.7 million conduit backed by 26 five-year loans secured by 51 properties from Wells, JPMorgan, LMF, Rialto, Argentic, Citi, Goldman, and UBS
7. VTR 2025-STEM, a $475 million SASB backed by a fixed-rate, four-year loan for Ventas and GIC to refinance two life-science properties totaling 811,000 square feet in Pennsylvania.
8. HAVN 2025-MOB, a $278.3 million SASB backed by a floating-rate, five-year loan (at full extension) for Welltower and Wafra to refinance 22 medical office properties in 13 states.
9. WFCM 2025-AURA, a $275 million SASB backed by a floating-rate, five-year loan (at full extension) for BTG Pactual and Morning Calm Management to refinance a portfolio of 24 industrial properties totaling 4.8 million square feet across Ohio and Michigan.

By the numbers: Year-to-date private-label CMBS and CRE CLO issuance totals $114.1 billion, representing a 43% increase from the $79.6 billion recorded for same-period 2024. 

Spreads Unchanged 

• Conduit AAA and A-S spreads were unchanged at +76 and +113, respectively. YTD, AAA and A-S spreads are wider by 1 bp and 8 bps, respectively. 
• Conduit AA and A spreads were unchanged at +160 and +190, respectively. YTD, they are each wider by 25 bps.
• Conduit BBB- spreads were unchanged at +475. YTD, they are wider by 50 bps.
• SASB AAA spreads held steady in a range of +105 to +132, depending on property type.
• CRE CLO AAA and BBB- spreads were unchanged at +130 and +335, respectively.

Agency CMBS

• Agency issuance totaled $3.4 billion last week, comprising $1.4 billion of Fannie DUS, $1.2 billion of Freddie K, Q, and Multi-PC transactions, and $797.3 million of Ginnie Mae Project Loan transactions.
• Agency issuance for the year totals $105.7 billion, 39% higher than the $75.9 billion for same-period 2024.
  

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CRE Securitized Debt Update

November 10, 2025

Private-Label CMBS and CRE CLOs

Four transactions totaling $3.5 billion priced last week:

1. BX 2025-JDI, a $1.5 billion SASB backed by a floating-rate, five-year loan (at full extension) for Blackstone to refinance 94 primarily industrial properties in seven states.
2. ELP 2025-ELP, an $859 million SASB backed by a fixed-rate, five-year loan for EQT Real Estate, GIC, Blackstone, and APG to refinance a portfolio of 60 industrial properties in nine states.
3. BBCMS 2025-5C38, an $834.2 million conduit backed by 41 five-year loans secured by 76 properties from Barclays, Goldman, Citi, LMF, Rialto, Deutsche, Starwood, Benefit Street, and UBS.
4. A10 2025-FL6, a $350 million CRE CLO sponsored by A10. The managed transaction comprises nine whole loans and 12 participations secured by 27 properties. The pool’s top three property types are multifamily (54%), retail (27.9%), and industrial (9.6%).

By the numbers: Year-to-date private-label CMBS and CRE CLO issuance totals $132.1 billion, a 31% increase from the $101.1 billion recorded for same-period 2024. 

Spreads Hold Steady

• Conduit AAA and A-S spreads were unchanged at +80 and +115. YTD, they are wider by 5 bps and 10 bps, respectively. 
• Conduit AA and A spreads were unchanged at +160 and +210. YTD, they are wider by 25 bps and 45 bps, respectively.
• Conduit BBB- spreads were unchanged at +475. YTD, they are wider by 50 bps.
• SASB AAA spreads were unchanged in a range of +113 to +137, depending on property type.
• CRE CLO AAA and BBB- spreads were unchanged at +135 and +340, respectively.

Agency CMBS

• Agency issuance totaled $3.9 billion last week, comprising $2.1 billion in Freddie Multi-PC and K transactions, $1 billion in Fannie DUS transactions, and $755.4 million in Ginnie-Mae Project Loan transactions.
• Agency issuance for the year totaled $126.5 billion, 33% higher than the $95.5 billion for the same period last year.

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Economy, the Fed, and Rates…

October 21, 2025

Economic Data 

• Shutdown distorts the picture: The government shutdown is delaying key releases and, if it persists, could trim roughly 0.1 percentage point of GDP per week, leaving policymakers "semi-blind" on the data.
• Inflation (near-term read): PriceStats points to 0.24% month-over-month for September, lifting the annual pace to 2.66%, the highest since October 2023. The strongest category was household equipment and furniture, now above 5% year-over-year, consistent with tariff costs feeding into prices of import-heavy categories (e.g., furniture, appliances), not local services.
• Labor market is weakening at the margin: Fed Chair Powell said "the downside risks to employment have risen," noting that private-sector gauges and internal research show cooling conditions; ADP estimated companies shed 32,000 jobs in September.
• Growth mix remains uneven: The AI investment boom has supported output, but the expansion is increasingly driven by wealth effects among stock-owning households, while lower-income consumers are being squeezed.

Federal Reserve: Policy Signals & Debate

• Bias toward another cut (Oct 29): Powell said longer-term inflation expectations are "aligned with our 2% goal" and indicated the Fed could halt quantitative tightening "in the coming months."
• "Proceed with care": Governor Christopher Waller backed continued easing but not a larger 50-basis-point move, citing mixed signals on growth and jobs.
• What markets price: Futures imply very high odds of a quarter-point cut on October 29, with debate intensifying beyond year-end as conflicting data and the shutdown muddle visibility.

Treasury Yields & Market Dynamics

• 10-year breaks below 4%: The 10-year Treasury yield fell below 4% last week (3.97%), its lowest level since April, driven by regional bank credit concerns and trade tensions, though it later recovered as fears abated.
• Repo market stress emerges: Banks used the Fed’s Standing Repo Facility for more than $15 billion—the largest two-day use since the pandemic—while the overnight repo benchmark (SOFR) printed 4.29% Thursday and 4.30% Friday, briefly above the 4.25% upper bound of the policy range. The episode appears settlement-related and short-lived, but it highlights tighter reserves and supports a slower pace of balance-sheet runoff.
  

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