Private credit defaults fall to 2.41% as small borrowers worsen

The US private credit default rate fell to 2.41% in the three months to September 2026 from 2.51% in the second quarter, the second consecutive quarterly decline, according to Proskauer's Private Credit Default Index.

The index, which tracks US senior-secured and unitranche loans, covered 746 loans with $205.7 billion in original principal. Alternative Credit Investor reported the index figures.

For fund selectors and direct-lending allocators, Proskauer's breakdown shows the smallest companies deteriorated while the largest improved, so loan-level default and watchlist data by EBITDA cohort and sector is the more useful request.

Borrowers with EBITDA below $25 million defaulted at 2.2% in the third quarter, up from 1.9% in the second. Companies with EBITDA of $25 million to $49.9 million edged down to 3.3% from 3.4%. Those with at least $50 million fell to 1.7% from 2.4%. In the second quarter the smallest cohort defaulted half a point less than the largest. In the third it defaulted half a point more.

Stephen Boyko, partner and co-founder of Proskauer's private credit group, said trailing 12-month defaults rose, software and technology defaults climbed, and performance varied by sector and borrower size.