2026 Q2 Private Credit Pulse Check

Private credit remains broadly resilient, but divergent default measures indicate that pockets of borrower stress are emerging as the credit cycle matures.

• Proskauer’s Private Credit Default Index fell from 2.73% in Q1 2026 to 2.51% in Q2 for U.S. senior-secured and unitranche loans.
• Default rates declined from 2.3% to 1.9% for companies with EBITDA of $25 million or less, rose from 3.1% to 3.4% for companies between $25 million and $49.9 million, and fell from 3.0% to 2.4% for companies with EBITDA of at least $50 million.
• Credit quality across large BDCs was generally stable to improving, with quarter-to-quarter changes driven mainly by a small number of company-specific credits rather than broad portfolio deterioration.
• Non-accrual cost percentages exceeding fair-value percentages is described as normal; the gap represents write-downs, with Blue Owl showing particularly marked-down impaired loans.
• Fitch’s broader Q2 measure put private-credit defaults at roughly 6%, but it includes distressed exchanges and restructurings and is therefore not directly comparable with BDC non-accrual rates.

Takeaway: The evidence points to a normalizing credit cycle with localized stress rather than systemic deterioration, but investors should account for differing default definitions and monitor vulnerable borrowers closely.