Arabic version: هيئة ASIC ترصد تصدعات كبيرة في الائتمان الخاص

According to ABC News, the Australian Securities and Investments Commission has warned that private credit is facing its “first real test” after several large borrowers collapsed and major funds limited redemptions. ASIC chair Sarah Court said the regulator was closely scrutinising a sector that is more lightly regulated than banking.

“It is early days, and no doubt more and more information will come out in the weeks and months to come, but, unfortunately, what we’re seeing is in Australia the first significant cracks,” Ms Court told a gathering in Sydney. She said private credit matters to Australians because of its connection with superannuation funds.

Reserve Bank governor Michele Bullock said the comparatively opaque debt market was a “big unknown”, noting that people do not know where leverage is or who is exposed. Documents released under freedom of information laws show the RBA has been examining the local sector, but it has not yet identified concerns about systemic risk to the overall financial system.

Recent developments have drawn attention to the market. NSW property developer Bathla appointed administrators, while Jon Adgemis became bankrupt and his hospitality group collapsed. As at June 30 last year, Bathla parent Universal Property Group had $3.2 billion in liabilities, mostly reportedly owed to private credit funds. Mr Adgemis borrowed $1.8 billion, much of it from private credit firms.

Several non-bank lenders, including Merricks, Longreach Credit and Centuria Bass, have restricted investor redemptions while managing liquidity constraints. MA Financial announced a temporary monthly redemption limit of up to 1 per cent of funds under management. The Financial Services Council has also released mandatory industry standards for private markets and private credit, which ASIC welcomed. ASIC said it would provide an update on its research later this year.