The Ledger

BDCs provide a rare, regulated window into the opaque world of private credit. Analyzing $65B in assets, we track the shift from cash interest to payment-in-kind (PIK) and the visible lag in defaults. The data reveals a gentle but persistent squeeze. It is proof that high rates are breaking borrowers, just slowly. While not a crash, the system is accommodating stress rather than resolving it.

Europe’s 2025 CMBS cohort offers a clear window on private valuations. Using disclosures across €6.9 billion of issuance, we show how appraised marks diverge from rating-agency values, with most deals in a 23% to 34% haircut band and a 29.6% median. The piece explains why this gap emerges, where it may persist in private markets with thin price discovery, and how investors should treat reported cushions and re-underwrite cash flows.

Life insurers have tilted away from Treasuries into structured and private credit, propelled by private equity ownership and NAIC treatment. Those flows are repricing markets, consistent with inelastic markets research that small, persistent allocations move prices. Record CLO issuance shows the shift; First Brands’ bankruptcy flags underwriting risk. The next test arrives as rules tighten in 2026.