Private credit is hard to read. Unlike public credit, which trades daily and provides clear market prices, private credit rarely trades and has limited disclosures.
But the available data paints a clear picture: stress is rising.
PIK interest has steadily climbed since 2023
Default rates are at multi-year highs
Foreclosures are on track to double this year
Read the full breakdown below.
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PIK Is Rising
PIK has always been part of private credit’s playbook. Direct lenders use flexible structuring to underwrite tough credits, and PIK interest is a common tool for this.
But use of PIK has materially increased in recent years. Lincoln International data shows the share of private credit interest being PIK’d has more than doubled since 2023.1