The private credit default rate rose to 2.46% in Q4 2025, from 1.84% in Q3 and 1.76% in Q2, according to Proskauer’s Private Credit Default Index.
Default rates rose the least for smaller borrowers (less than $25 million of EBITDA), increasing from 1.6% to 1.7% quarter-over-quarter.
Default rates for mid-sized and larger borrowers (over $50 million in EBITDA) rose from 1.2% to 2.4% in the same period, while those for mid-sized borrowers (between $25 million and $49.9 million in EBITDA) rose from 2.6% to 3.6%.
The index tracks US senior secured and unitranche loans, including 691 loans representing $144.5 billion in original principal amount.
The increase was described as “modest” by Stephen A. Boyko, partner in Proskauer’s private credit group, who said that the sector is “managing through the bumps in the road.”
For comparison, the default rates in 2025 for the Morningstar LSTA US Leveraged Loan Index were as follows:
- Payment default rate by amount: 1.23%, up from 0.91% in 2024.
- Payment default rate by issuer count: 1.18%, down from 1.45% in 2024.
- Dual-track default rate by issuer count: 3.35%, down 130 bps from 2024.
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