QuoteSince last fall, we have repeatedly flagged the private credit sector's growing vulnerabilities.
Earlier coverage detailed how the asset class ballooned into a $2-3 trillion opaque market after banks retreated from riskier lending, only to face a wave of high-profile defaults (First Brands, Tricolor) (https://www.zerohedge.com/markets/creditors-bankrupt-first-brands-say-billions-simply-vanished-amid-debt-rehypothecation), surging redemptions that forced gates at major vehicles (https://www.zerohedge.com/markets/blue-owl-plunges-after-halting-redemptions-private-credit-retail-fund), rising PIK usage, and AI-related risks to software-heavy portfolios.
Link: https://www.zerohedge.com/markets/strain-spreading-ft-exposes-private-credit-distress-decade-highs