Forming a complete and timely picture of private credit is challenging, as data is often lagged, sparse, and inconsistent. As Q2 reporting wraps up and headlines fly, we examine the most recent data to gauge current conditions.
Proskauer Private Credit Default Index, which tracks senior-secured and unitranche loans in the United States, reported a default rate of 2.51% for Q2, a decrease from 2.73% in Q1 2026. "The slight decline in the overall default rate this quarter reinforces the resilience of the private credit market despite continued economic uncertainty.”
- Companies with EBITDA <= $25 million, a modest decrease from 2.3% in Q1 to 1.9% in Q2.
- Companies with EBITDA $25 million - $49.9 million, a modest increase from 3.1% in Q1 to 3.4% in Q2
- Companies with EBITDA >= $50 million, a decreased from 3.0% in Q1 to 2.4% in Q2.
Credit quality across large BDCs was generally stable to improving in Q2, broadly consistent with Proskauer’s Private Credit Default Index declining to 2.51% from 2.73% in Q1.
Much of the quarter-to-quarter movement appears tied to a relatively small number of company-specific credits rather than broad-based portfolio deterioration, pointing to idiosyncratic events rather than broad-based deterioration.
Non Accrual cost % higher than FV % is the normal pattern, and that gap is the write-down. The divergence, most notably in Blue Owl's case, shows that the impaired loans have already been marked down significantly.
Fitch’s Q2 data, on the other hand, shows the private credit default rate rising to roughly 6%, in contrast to the relatively stable Q2 credit picture reported by BDCs. However, the measures are NOT apples-to-apples: Fitch’s definition of default includes distressed exchanges and restructurings, capturing stress that may not appear in BDC non-accrual rates. Still, the data suggests that pockets of stress are building across the market.
As the economy moves through a period of disruption, some of that pressure will inevitably flow through to private credit, leaving certain borrowers more vulnerable. For now, the evidence appears consistent with a normal credit cycle rather than a systemic deterioration in credit quality.