Private Credit Defaults May Reach 3% in Consumer Sector: KBRA

The consumer sector is expected to push private credit defaults to 3% this year, according to a KBRA report released Wednesday.

• The 3% forecast equates to approximately 72 defaults, with consumer industry issuers expected to drive roughly one-fifth of default volume
• KBRA’s default rate for borrowers in its observed direct lending index stands at 1.9%, with 45 total defaults
  • The exact default rate for 2024 will be finalized following BDC filings for the fourth quarter of 2024 next month
• For sponsored deals, KBRA forecasts a 2.75% default rate for 2025, suggesting about 53 defaults
  • Within sponsored deals, consumer sector borrower ...