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Stress index 55 (Elevated): 2 of 6 layers flashing
Glitch in the Credit · Oct 25, 2026
55 out of 100, Elevated. 2 of 6 layers are flashing: weakest borrowers and funds. The chain reaction isn’t complete yet: collateral isn’t flashing.
What changed overnight
This is the first check, so there’s nothing to compare yet.
Flashing right now
- Neocloud stocks: CoreWeave, Nebius and IREN each down 30%+ in October source
- Neocloud bonds: CoreWeave 2031 notes yield a record 15.76% source
- Delayed projects: Roughly 30–50% of 2026 US capacity delayed or canceled source
- Redemption gates: Gates at several managers at once source
- Public BDC discounts: Sector about 29% below stated NAV source
- Credit default swaps: CoreWeave 5-yr CDS about 1,145bp; Oracle at a record source
- Pulled deals: Data center financing reported frozen after the CoreWeave rout source
The numbers
- CCC spread: 1,340bp (vs 340bp for junk overall)
- Bank loans to nonbanks: +19.6% (over a year)
- Median BDC vs book: −12% (5 of 10 more than 10% below)
- Median PIK share: 11.0% (was 9.9% a year ago)
- Private credit funds running cash-out windows: 55 (last 90 days: 55 offers, 6 updates)
- Recession this year: 6% (yes)
- Recession in 2027: 21% (yes)
- Fed decision in Oct 2026: 93% (Fed maintains rate)
- Fed decision in Dec 2026: 75% (Hike 25bps)
Worth watching today
- Hyperscaler lease pullbacks (watch, getting worse): No outright cancellations found; delay penalties now above $5M a day
- Amend-and-extend deals (watch, getting worse): Shadow default rate estimated above 10%
- Marks vs market prices (watch, getting worse): BDCs mark loans at 97.6% of cost; the market prices them far lower
Not a timing tool. Not financial advice.
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