How Does the Default Outlook for the Middle Market Compare to BSL?

Fitch Ratings|April 23, 2024

Content hub / Article / Fitch Ratings / How Does the Default Outlook for the Middle Market Compare to BSL?

Download FitchRating’s Report here.

The default rate for loans in Fitch’s U.S. Leveraged Loan Universe was 3.3% at the end of 2023, in line with our forecast of 3.0%-3.5% and up from just 1.6% the previous year. The default rate for BSL companies in the index was 3.1%, up from 1.6% in 2022, while the same rate for large middle market (LMM) companies was 5.6%, up from 1.4% yoy.

The 5.6% recorded for the LMM segment was the highest rate that Fitch has recorded since we started tracking in 2007, while the BSL figure was only slightly above long-term averages. The LMM part of Fitch’s Leveraged Loan Universe consists largely of syndicated loans.

(Past performance is no guarantee of future results.)

Contact Brad Hamner

Webinar

Making sense of private credit defaults

What does private credit default data really tell us? Join our exclusive webinar featuring experts from KBRA, Moody's, Fitch Ratings, and S&P Global to find out.

Report

Credit Journal-Private Credit

Fitch Ratings’ latest Credit Journal series is a subject-specific, curated compilation of in-depth research and commentary. This edition explores the growing world of private credit, including non-bank lending across business development companies.

Download

Report

PitchBook's US PE Middle Market Report

The middle market is off to its best start to a year since 2021, but its share of PE keeps slipping.

Download

September 15-16, Hudson Yards, New York

Private Debt Investor New York Forum

Bringing together the investors, managers and advisers shaping the next phase of the market — 200+ allocators and $10.6 trillion of LP capital expected. Benchmark strategies, hear from leading LPs, and cut through market noise over two unmissable days.

Learn more