Neutral impactEconomy
US private credit portfolios show signs of stabilisation in second quarter
Economic Times 1 hr ago·3 Sept 2026, 8:44 am
US private credit markets have shown signs of stabilizing in the second quarter of 2026, despite continued challenges. Lenders have been marking down loans in the software sector, and there has been a rise in non-accrual debt. This has caused portfolio values to dip below their reported costs, largely due to significantly widened market spreads.
This trend highlights rising pressures within specific areas of the private credit landscape. For investors, it is a reminder that credit quality can vary across different sectors and that market spreads are a key factor to monitor. The stabilization in broader portfolios is positive, but the software sector's markdowns suggest that caution is still warranted in this area.
Investors should watch for further developments in market spreads and the pace of credit recovery. The divergence between the stabilizing broader market and the struggling software sector could offer insights into future credit trends and investment opportunities.
Excerpt from Economic Times
In the second quarter of 2026, US private credit portfolios experienced a notable trend of stabilization, despite lenders continuing to mark down software loans. There was an increase in non-accrual debt, leading to portfolio values dipping below reported costs due to significantly widened market spreads. This…Read the original at Economic Times
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