The rate of senior loan writedowns by private credit funds has more than tripled since 2022, as higher interest rates place increasing pressure on riskier borrowers, according to a report by Reuters citing MSCI.
The private credit market has come under closer scrutiny following a series of high-profile US bankruptcies that have raised concerns over credit quality. MSCI said two years of elevated interest rates are beginning to expose deeper stress across portfolios.
Writedowns of 20% on senior loans — which MSCI describes as a key threshold for distress — have increased sharply since rates rose in 2022. While widespread restructurings have yet to materialise, the index provider said impairments are becoming more pronounced, with more than 5% of senior loans facing 50% writedowns.
