US Private Credit Defaults Hit New Highs but Losses Remain Contained
At 9.2%, the default rate within Fitch’s privately monitored ratings (PMR) portfolio exceeded the default rate recorded for Fitch’s broadly syndicated loan (BSL) universe which reached 4.5% for the year. Fitch continues to believe the default rate in the PMR portfolio may be structurally higher than the BSL default rate because sponsors and lenders more often engage in what Fitch considers to be “collaborative defaults,” and because repeat defaulters are more prevalent in private credit.
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