Intelligence Feed event · Credit · 2026-09-12

    Houlihan Lokey flags rising loan distress in sub-$100M EBITDA private credit

    Question

    Houlihan Lokey flags rising loan distress in sub-$100M EBITDA private credit

    Direct answer

    Advisory firm Houlihan Lokey published data identifying concentrated stress within smaller private credit issuers. Borrowers generating under $100 million in EBITDA have experienced default rates rising to 3% measured by loan value. Dislocation is steepest among micro-caps with EBITDA between $10 million and $20 million, where 12% of outstanding debt now trades below 90% of par value, compared to just 1% recorded in 2023.

    Original publisher
    Market Ontology
    Evidence through
    2026-09-12
    Published
    2026-10-20
    Revision
    1 · 2026-10-20

    Cite as: Market Ontology, “Houlihan Lokey flags rising loan distress in sub-$100M EBITDA private credit”, revision 1, evidence through 2026-09-12. https://marketontology.com/market-events/2026-09-12/houlihan-lokey-flags-rising-loan-distress-in-sub-100m-ebitda-private-credit-92ae28

    CREDIT
    Houlihan Lokey flags rising loan distress in sub-$100M EBITDA private credit
    Advisory firm Houlihan Lokey published data identifying concentrated stress within smaller private credit issuers. Borrowers generating under $100 million in EBITDA have experienced default rates rising to 3% measured by loan value. Dislocation is steepest among micro-caps with EBITDA between $10 million and $20 million, where 12% of outstanding debt now trades below 90% of par value, compared to just 1% recorded in 2023.
    HLISPY
    Impact
    78
    SEP 12
    SIG
    88%
    HLISPY
    Houlihan Lokey flags rising loan distress in sub-$100M EBITDA private credit
    Advisory firm Houlihan Lokey published data identifying concentrated stress within smaller private credit issuers. Borrowers generating under $100 million in EBITDA have experienced default rates rising to 3% measured by loan value. Dislocation is steepest among micro-caps with EBITDA between $10 million and $20 million, where 12% of outstanding debt now trades below 90% of par value, compared to just 1% recorded in 2023.
    → Deteriorating coverage ratios in sub-$100M EBITDA credits widen secondary market discounts and constrain direct lending refinancing liquidity for lower-middle market issuers.
    Impact
    Advisory firm Houlihan Lokey published data identifying concentrated stress within smaller private credit issuers. Borrowers generating under $100 million in EBITDA have experienced default rates rising to 3% measured by loan value. Dislocation is steepest among micro-caps with EBITDA between $10 million and $20 million, where 12% of outstanding debt now trades below 90% of par value, compared to just 1% recorded in 2023.
    Affected
    HLISPY
    Transmission
    Deteriorating coverage ratios in sub-$100M EBITDA credits widen secondary market discounts and constrain direct lending refinancing liquidity for lower-middle market issuers.

    How this development reaches the affected companies

    AssetExposure and channelDirectionEvidence
    HLIincreased financial restructuring advisory mandate volumeUp1-3mHoulihan Lokey tracking rising private credit stress across small corporate borrowers.
    SPYcredit risk contagion monitor into broader small/mid cap liquidityWatch1-4wStress remains concentrated in smaller borrowers while larger balance sheets remain resilient.

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    What happened next

    AssetCallBase close+1 day+5 days+20 days
    SPYWatch764.29 2026-09-11-0.45%-0.34%+1.87%

    Closing prices from stored daily bars; returns measured from the last close on or before the event date. Not a recommendation.

    No verifiable public source recorded for this card.

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