Private Credit Distressed Loans Hit 2017 High as Non-Accrual Ratio Climbs to 2.8%
Updated
Updated · asiae.co.kr · Aug 18
Private Credit Distressed Loans Hit 2017 High as Non-Accrual Ratio Climbs to 2.8%
3 articles · Updated · asiae.co.kr · Aug 18
Summary
Solve data showed the median non-accrual loan ratio at the 20 largest private-credit BDCs rose to 2.8% in the second quarter from 2.0% in March—the highest distressed-loan level since 2017.
Higher rates are squeezing borrowers backed during the 2020-2021 low-rate buyout boom, leaving some companies using most of their cash flow to service interest rather than invest or grow.
Listed lenders are already absorbing the strain: portfolios shrank in Q2 as sales and repayments outpaced new lending, FS KKR Capital posted a 7.1% distressed-loan ratio, and BlackRock's TCPC sold $523 million of loans.
The deterioration adds to warnings from Golub Capital and Fitch, which said private-credit defaults hit a record high in July, though managers such as Blue Owl argue problems remain limited and most loans are still paying on time.