Private Credit ‘Hysteria’ Will Get Very Real Next Year

Private credit losses from borrowers defaulting remain low — so has everyone just “lost their minds” and the press got “hysterical” about the risks, as Apollo Global Management Inc. Chief Executive Officer Marc Rowan says? Not entirely.

The lack of transparency is one reason that investors, and journalists, could be more fearful than is warranted by historical performance, as I’ve written plenty about. But there’s illuminating data, too, from analysts and ratings companies that show the outlook for repayment problems and bankruptcies isn’t great. In fact, it’s getting worse.