US private credit unrealized losses deepen in first quarter
Unrealized losses at US private credit lenders hit 2.35 percent of net asset value in the first quarter. High non-cash interest income signals rising stress.
United States private credit lenders recorded aggregate unrealized losses of 2.35% of net asset value during the first quarter—the steepest quarterly decline for business development companies (BDCs) since the second quarter of 2022. Rising borrowing costs and valuation pressures are straining middle-market borrowers, signaling U.S. private credit's first major credit cycle since the Global Financial Crisis.
### Portfolio Markdowns Hit BDC Valuations A Reuters analysis of 51 BDCs found that portfolio markdowns deepened as investors scrutinized non-accruals and redemption requests. While unrealized losses do not constitute immediate defaults, they reduce reported net asset value and indicate weaker recovery expectations for outstanding loans.
