Private credit default rates range from 1-2% based on manager-reported data to over 6% according to rating agencies, with Fitch Ratings placing the trailing twelve-month rate at 6.3% through August 2026. The gap stems from differing definitions of ‘default’ and the lack of market standardization, unlike public credit markets with uniform reporting rules. Healthcare and industrial/manufacturing sectors show default rates near 10%, while 12% of smaller borrowers with EBITDA below $25 million were trading below 90 cents on the dollar in Q2 2026. For institutional investors, this opacity makes fund performance comparison difficult and requires thorough analysis of underlying methodologies.
Source: Read the original article
