The private credit default rate in the US declined slightly to 5.2 per cent in the 12 months to July this year, according to Fitch Ratings.
This was down slightly from 5.5 per cent in June, but was still high compared to the rate of 4.6 per cent recorded in December 2024.
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The private credit default rate comprises the privately monitored rating default rate and the new model-based credit opinion default rate. Both of these rates declined in July, with the former falling to 9.2 per cent, down from 9.5 per cent, while the latter declined to 4.2 per cent from 4.5 per cent.
Interest payment deferrals and the introduction of payment in kind instead of cash interest drove 70 per cent of the 63 unique defaults captured during the period ending July 2025.
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Bankruptcies or liquidations led to around 5 per cent of unique defaults, while stressed maturity extensions accounted for 14 per cent.
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