US Private Credit: Seven Questions For the Second Half

Research evidence excerpt

US Private Credit: Seven Questions For the Second Half

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Global Strategy Global Strategy

GlobalUS Private Credit: Seven Questions For the

Second Half Sachin Ganesh

Associate Strategist

sachin.ganesh@ubs.com

+1-212-713 1062

Executive Summary Matthew Mish, CFA

The kickoff to U.S. earnings season next week, particularly the wave of BDC results Strategist

starting in the final week of the month, should test three key questions on private credit: matthew.mish@ubs.com

+1-203-719 1242

1) whether fundamentals are deteriorating further, 2) whether private marks are

converging toward public markets, and 3) whether investors are starting to differentiate Julien Conzano

more aggressively across managers. We address each of these themes in our latest FAQ- Strategist

style analysis, focused on the top client questions that we have received so far this julien.conzano@ubs.com

+44-20-7567 2067

summer on US private credit, including updates on recent trends in default activity,

maturity walls, private loan valuations, redemption trends, and recovery expectations. Henry Morrison-Jones

Our central view remains that private credit default rates are set to rise 4-5% Strategist

cumulatively through H1’27, alongside more high-profile default events and rising henry.morrison-jones@ubs.com

+44-20-7901 6656

dispersion across private lenders. The evidence suggests that some dispersion has

started to show, with additional scope for it to broaden further in the second half. Bhanu Baweja

Strategist

bhanu.baweja@ubs.com

Fundamentals +44-20-7568 6833

Have there been any high-profile private market defaults recently, and from

which sectors? Filings continue to rise, with real estate a weak spot