All articles tagged with #privatecredit
Defaults in the private credit market have reached a record level as higher interest rates weigh on borrowers, signaling increased distress for private debt borrowers and potential ripple effects for lenders and private funds.
UBS strategists warn that a rapid and severe AI disruption could push private credit default rates up to 15%—well above the current 3–5%—as lender exposure to software and sponsor-backed loans gauges rise, with market moves around Blue Owl and other asset sales fueling investor concern, though some say the worst-case scenario may be overstated.
US IRS proposals to tighten Section 892 could strip tax-exempt status from sovereign wealth funds and some public pensions that engage in US investments, by redefining when debt purchases and other activities count as 'commercial activity' and by widening 'effective control' tests. The changes would affect private credit, private equity co-investments and real assets, potentially costing SWFs billions in avoided taxes and prompting restructurings or shifts to more passive strategies; final rules are not settled yet, with comments due Feb 13.