Private credit defaults record largest quarterly jump, KBRA says
A record 112 borrowers with private debt defaulted on their obligations, marking a 22% increase from the previous quarter, KBRA said
Private credit defaults surged to a record 112 companies in the latest quarter, marking a 22% increase from the previous period, according to Kroll Bond Rating Agency (KBRA). The report, which analyzed over 3,000 middle-market companies with $1.4 trillion in direct-lending debt, highlights the growing vulnerability of smaller borrowers to operating, liquidity, and leverage pressures.
The rising cost of debt, declining sales growth, and reduced sponsor support have all contributed to the increase in defaults, particularly among lower and core middle-market firms.
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