What moved
Moody’s puts global private credit at $3.8tn in 2025, compounding at 14 per cent a year to $7.4tn by 2030. APAC is the smallest region at roughly $85bn of fund AUM, but grew 23 per cent in dollar terms from 2021 to September 2025 — an estimated 41 per cent stripping out currency — against 25 per cent in Europe and 35 per cent in the US. Managers based outside the region hold about a quarter of APAC AUM, and the APAC insurer share rose from 14 per cent in May 2024 to 40 per cent by July 2026.
Why it matters for pricing
Transfer pricing benchmarks rest on an assumption that is quietly eroding: that the observable market and the borrower’s realistic alternative are the same market. Comparable searches run against rated public bonds and syndicated loans because that is the data that exists. Private credit terms are, by definition, not published. As lending shifts out of banks and public markets into private funds, the visible universe shrinks precisely where the borrower’s real options are growing.
The gap is widest exactly where mid-market and PE-backed groups sit. A sponsor-backed borrower in Singapore or Australia looking for eighty million dollars is not issuing a rated bond. Its realistic alternative is a direct lending facility — different tenor, different covenant package, different price, and unobservable. Benchmark it against a public bond sample and you have priced it against a market it cannot access — the one thing Chapter X asks you not to do. The options realistically available to the borrower are the test.
APAC compounds it. Moody’s is explicit that the region is not a smaller version of the US market: it is bank-adjacent rather than a bank substitute, relationship-led rather than sponsor-led, and it prices for enforceability, collateral access, FX mismatch and legal fragmentation. Those are real pricing factors and they differ by jurisdiction. A single regional spread across an APAC group is not a simplification — it asserts that Singapore, India and Indonesia present a lender with the same risk, which nobody believes.
Our call. The observable comparable universe keeps shrinking relative to the real one, fastest in APAC mid-market and PE-backed structures. Expect benchmark quality rather than availability to become the contested point in audits, and credit analysis and internal CUPs to carry more weight than a screened bond sample can bear.
What this means for your business
- Establish what the borrower’s realistic alternative actually is before selecting the comparable set. If it is a direct lending facility, a rated bond sample is not the market.
- Where private credit is the real alternative and its terms are unobservable, say so in the file and build the price from credit analysis, rather than presenting a search that was never capable of being complete.
- Do not run one APAC spread. Enforceability, collateral access and legal fragmentation price differently in Singapore, India and Indonesia, and a lender would price them differently too.
- Fund managers: the perimeter includes subscription lines, NAV facilities and the guarantee packages around them. Most fund structures have never had that perimeter drawn at all.
Sources
Moody’s Ratings, “Beyond the US and Europe: The Rise of APAC Private Credit”, APAC webinar presentation, 2026; underlying data attributed to Preqin, Moody’s Ratings, the Reserve Bank of India and the Hong Kong Monetary Authority. OECD Transfer Pricing Guidelines, Chapter X. Figures as presented, August 2026.