Private Credit Defaults Climb To 6.3% In August, Fitch Says

U.S. private-credit stress is ticking higher as Fitch Ratings put the trailing 12-month default rate at 6.3% through August 2026, edging up from July’s 6.1% and setting a new high. The gauge has remained above 6% since April, indicating persistent strain in the middle-market lending universe.

In its update, Fitch Ratings reported that August alone produced 14 default events, a jump from three in July and the largest monthly count within the current trailing-year window. The firm said 11 of those events came from first-time defaulters during the period, with three tied to repeat offenders.

Across the trailing 12 months ended in August, Fitch counted 89 distinct issuers that defaulted, generating 109 total default events. The prior month’s tally was 83 issuers and 105 events.

Default "types" skewed heavily toward amendments rather than missed payments, according to Fitch Ratings, with interest deferrals and payment-in-kind substitutions making up 47% of events in the trailing-year period. Maturity extensions executed under stress represented 41% over the same window, while uncured payment failures were listed at 8%. The remaining 4% covered bankruptcies, liquidations and restructurings that transferred control from sponsors to lenders.

Fitch also broke out August’s defaults by industry, with healthcare providers, business services (general), and transportation and distribution each logging two events. The remaining defaults were spread across eight other industries.

Smaller companies continued to show the highest default intensity by earnings size, with issuers under $25 million of EBITDA posting a 12.0% trailing-year default rate in August, down from 12.3% in July. The $26 million to $50 million EBITDA group rose to 5.2% from 3.9%, and Fitch described that cohort as the largest slice of its private-debt coverage.

On a sector basis, healthcare providers had the most unique defaulters in the trailing-year period, totaling 18, alongside a 9.9% default rate that increased from 9.5% in July and 6.9% a year earlier. Industrial and manufacturing also came in at a 9.9% default rate, up from 9.5% in July and 5.2% in August 2025.

Consumer products and services showed a modest improvement, with its default rate easing to 8.7% in August from 9.9% in July. Technology software remained the lowest among the largest sectors at 0.6% in August, down from 1.2% in July and 2.0% in August 2025, and Fitch said the sector added one new unique defaulter in the trailing-year period.

The firm said its private credit default rate blends two measures: a model-based credit opinion series tracking more than 1,300 credit opinions used in pooled-asset ratings such as middle-market CLOs, and a privately monitored ratings series covering more than 350 private ratings often used by insurers for capital purposes. 

Fitch reported the model-based component rose to 5.6% in August from 5.2% in July, while the privately monitored component slipped to 8.5% from 8.6% after peaking at 10.0% in March 2026.

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