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3. Loans quietly go soft

This layer is watch: it scores 57.5 of 100, with 0 of 3 signals flashing.

  • PIK interest sharewatchsteady

    Mixed: Blue Owl's PIK share up to 7.9%, Hercules down to 8.3%

    The SEC XBRL data for Q2 is mixed: Blue Owl Capital Corp's PIK share rose to 7.9% from 6.3%, Golub to 11.0% from 9.9% and Oaktree Specialty to 7.5% from 6.7%, while Hercules fell to 8.3% from 9.9%. Ares (15.2%) and FS KKR (12.5%) only have Q1 numbers so far. Q3 reports land in the first half of November.

    SEC EDGAR: Blue Owl Capital Corp XBRL company facts · Jun 30, 2026

  • Amend-and-extend dealswatchsteady

    Shadow default rate estimated above 10%

    Valuation Research still counts more than 10% of valued private credit borrowers as having done, or being about to do, a material amendment. That keeps loans out of default on paper without fixing cash flow, and the estimate's contested. Nothing new found today.

    Valuation Research: Q3 2026 private credit update · Oct 15, 2026

  • Marks vs market priceswatchworsening

    BDCs mark loans at 97.6% of cost; the market prices them far lower

    BDCs carried loans at 97.57% of cost in Q2 while the market says otherwise: FS KKR trades at 57% of its June NAV, Prospect at 26% and Blue Owl Capital Corp at 71%, per today's closes. Moody's has 2026 maturities marked at 88.8% of cost. No new forced writedowns found.

    Reuters via Investing.com: private credit firms mark down more loans · Sep 30, 2026

Layer history

CheckedScoreStatus
Oct 26, 202657.5watch
Oct 25, 202650watch