There’s more stress in credit than it seems.
Despite several macro headwinds - high rates, inflation, the conflict in Iran - spreads are tight and defaults are moderate.
But this data doesn't tell the full story. Credit has changed significantly over the last decade, making distress much harder to judge.
How credit risk has shifted:
Private credit has absorbed the riskiest borrowers
LMEs are pushing off defaults and bankruptcies
Read the full breakdown below.
This Week’s Reads
Credit is Opaque
Today, high yield spreads sit near decade lows.
Defaults tell a similar story. S&P data shows year-to-date defaults, as of April ‘26, at the lowest level in four years.
But this data has become less meaningful.
Private credit growth and the surge in LMEs have made distress less visible.
Going Private
Private credit has grown into a critical piece of the market. AUM is over $2 trillion, roughly matching the size of the broadly syndicated loan and high yield markets.