US private debt default rate hits record high in August: Fitch Ratings

The US private credit market just posted its worst default numbers on record. Fitch Ratings reported that the trailing 12-month default rate for private debt borrowers reached 6.3% at the end of August, up from 6.1% in July and extending a streak of record-setting months that has defined 2026 so far. The numbers behind the record August saw 14 private credit default events, the highest monthly total since Fitch began tracking this data in 2024. Of those 14, 11 were unique borrowers while three were repeat defaults, meaning companies that had already stumbled once came back for an encore. The trajectory throughout 2026 tells a clear story of deterioration. The default rate stood at 5.7% at the end of Q1, crept up to around 6% by April and May, and has now accelerated to 6.3%. Each data point has represented a new all-time high for the index. Not all sectors are suffering equally. Healthcare providers and industrial/manufacturing companies posted the steepest 12-month default rates at 9.9% each. By contrast, software companies reported a default rate of just 0.6%. Companies with EBITDA of $25 million or less have consistently posted the highest default rates. Why the pressure keeps b...