Can I sell an NCD before it matures?

Often yes, if it is listed on an exchange, though how easily it sells depends on how actively that specific NCD is traded.

Can I sell a private performing credit position early?

Usually not easily. Most private credit deals expect you to hold until the agreed repayment date.

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Performing Credit vs NCDs: What Is the Difference?

Aryan Singh1 min read

What an NCD Actually Is

NCD stands for Non-Convertible Debenture. In simple terms, it is a bond issued by a company that pays you interest over time and returns your original amount at the end, and it cannot be converted into company shares later.

Many NCDs are listed and can be bought or sold on a stock exchange, which means, in normal conditions, there is at least some possibility of selling before the final repayment date, unlike most private loans.

What Performing Credit Actually Means Here

Performing credit, in this comparison, refers to a privately arranged loan to a business that is currently being repaid on schedule, without any public listing or exchange to trade it on.

Because there is no exchange, an investor in a performing credit deal usually cannot sell their position before the agreed end date, making it far less liquid than a listed NCD.

How Risk and Return Typically Compare

NCDs, especially from well-known, established companies, often come with published ratings and more public information, which can make them easier to evaluate before investing.

Private performing credit deals may offer higher interest in exchange for less public information, less liquidity, and a need for the investor, or their platform, to do more of the borrower research directly.

Choosing Between the Two

If having the ability to exit early matters a lot to you, a listed NCD may fit better, since it at least offers a market to potentially sell into, even if that market can be thin at times.

If you are comfortable holding until the end date, in exchange for potentially higher returns and are relying on thorough borrower diligence from the platform arranging the deal, a private performing credit deal may make sense.

Key takeaways

NCDs are bond-like instruments that are often listed and can potentially be traded before maturity.
Performing credit deals are usually privately arranged loans with no exchange to sell into early.
NCDs often come with more public information and ratings; private credit relies more on direct diligence.
Choose based on how much you value the ability to exit early versus potentially higher private credit returns.