Private Credit Pushes Deeper Into Risk Wall Street Is Fleeing

The $1.7 trillion private credit industry is set on transforming itself into the world’s new banks, and it’s putting on display an ever greater tolerance for the risks of lending to indebted companies.

Lately, that’s meant coming up with ways to stabilize companies wobbling under a third year of elevated interest rates. For some borrowers, the beginning of lower Federal Reserve interest rates, widely expected to start in September, may not come soon enough. Squeezed borrowers are finding it harder to engage with public markets, and that’s left them looking for stop-gap measures from private lenders.

“An absence ...