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Fitch’s Privately Monitored Ratings Portfolio, Rating Activity
The issuer-weighted TTM default rate for PMRs rose to 9.5% in 2Q25 from 7.8% in 1Q25. Fitch recorded 28 unique defaults for the TTM period, up from 23 in 1Q25. This is the highest default rate since tracking began in 2017. Smaller, private issuers are more vulnerable than larger peers to economic swings, GDP slowdowns, and persistent elevated rates. Their floating-rate structures increase this risk.
Including repeat defaults by the same issuer, Fitch recorded 36 defaults in the TTM period ending 2Q25. Four defaults involved Chapter 11 bankruptcy or liquidation. Half of the cases involved interest deferrals or conversions of cash interest to payment-in-kind. Eight defaults were maturity extensions under stress.
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Q2'26 BDC analysis shows additional 184 bps of nonaccruals at cost
In a universe of 173 business development companies, or BDCs, Octus identified a total of $9.5 billion of debt (at cost) in nonaccrual status reported in the second quarter of 2026, a slight decline of 5% from $10 billion in the first quarter of 2026.
Reading the Board
The story changes depending on which numbers you’re counting.
Private Credit Defaults 101: Different Numbers, Different Stories
In Season 2 of Billions, Bobby Axelrod takes his lawyer Orrin Bach to an empty Yonkers racetrack in the dead of night.