Private Credit Facing ‘Clear Signs’ of Rising Stress, BofA Says

Signs of elevated stress are emerging within the $1.7 trillion private credit market as default rates are rising and more borrowers are choosing to defer cash interest payments, according to a Bank of America Corp. report.

Private debt default rates remain higher than those in public credit, analysts wrote in the Thursday report, though metrics vary widely depending on datasets.

Realized losses across business development companies — a popular vehicle for private credit funds — hit more than $1 billion in the second quarter, the highest dollar value since the pandemic, Bank of America said in its report. Losses have ...