Private-Credit Defaults Match 2023 High in $300 Billion Index (opens original article in a new tab)

Private-credit default rates hit a three-year high of 2.3% in the KBRA DLD Direct Lending Index, with expectations of further increases through 2026, raising concerns about recovery rates and industry stability.

• Private-credit default rate reached 2.3% in KBRA DLD Direct Lending Index, matching 2023 high.
• KBRA expects default rate to rise to 3.5% by 2026, with $7.6 billion in loans expected to default in 2026.
• Implied recovery rates for small- and mid-sized borrowers are forecast to drop from 46% to 36% in 2026.