Bankrupt Car Wash Exposes Flaws in Private Credit Valuations

One fund marked it at 93 cents on the dollar. Another had it at 94 cents. A couple more kept it as high as 95 cents.

On paper, private credit firms appeared optimistic about a $654 million loan they had provided to Zips Car Wash. Those valuations, at the end of September, implied a strong chance the debt would be repaid in full.

As it turns out, the auto wash operator was in deep trouble.

Between March and September, Zips had already obtained a 10-month extension on the maturity of the loan, tried and failed to secure viable refinancing ...