Intelligence Feed event · Credit · 2026-09-12

    Houlihan Lokey flags widening default stress in smaller private debt

    Question

    Houlihan Lokey flags widening default stress in smaller private debt

    Direct answer

    Advisory firm Houlihan Lokey released data indicating that credit stress is building rapidly among smaller direct-lending borrowers. Companies generating under $100 million in annual EBITDA are seeing 3% default rates. The $10 million to $20 million EBITDA segment is experiencing acute pricing degradation, where 12% of secondary loans are now marked below 90% of par, up from just 1% 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 widening default stress in smaller private debt”, revision 1, evidence through 2026-09-12. https://marketontology.com/market-events/2026-09-12/houlihan-lokey-flags-widening-default-stress-in-smaller-private-debt-3d56fd

    CREDIT
    Houlihan Lokey flags widening default stress in smaller private debt
    Advisory firm Houlihan Lokey released data indicating that credit stress is building rapidly among smaller direct-lending borrowers. Companies generating under $100 million in annual EBITDA are seeing 3% default rates. The $10 million to $20 million EBITDA segment is experiencing acute pricing degradation, where 12% of secondary loans are now marked below 90% of par, up from just 1% in 2023.
    HLIHYG
    Impact
    82
    SEP 12
    SIG
    85%
    HLIHYG
    Houlihan Lokey flags widening default stress in smaller private debt
    Advisory firm Houlihan Lokey released data indicating that credit stress is building rapidly among smaller direct-lending borrowers. Companies generating under $100 million in annual EBITDA are seeing 3% default rates. The $10 million to $20 million EBITDA segment is experiencing acute pricing degradation, where 12% of secondary loans are now marked below 90% of par, up from just 1% in 2023.
    → Rising debt-service burdens on unhedged floating-rate facilities reduce cash coverage in sub-$20M EBITDA borrowers, widening secondary loan discounts below 90% of par.
    Impact
    Advisory firm Houlihan Lokey released data indicating that credit stress is building rapidly among smaller direct-lending borrowers. Companies generating under $100 million in annual EBITDA are seeing 3% default rates. The $10 million to $20 million EBITDA segment is experiencing acute pricing degradation, where 12% of secondary loans are now marked below 90% of par, up from just 1% in 2023.
    Affected
    HLIHYG
    Transmission
    Rising debt-service burdens on unhedged floating-rate facilities reduce cash coverage in sub-$20M EBITDA borrowers, widening secondary loan discounts below 90% of par.

    How this development reaches the affected companies

    AssetExposure and channelDirectionEvidence
    HLIfinancial restructuring advisory mandate volume growthUp1-3mHoulihan Lokey tracks rising restructuring opportunities in stressed private credit.
    HYGcredit spread widening on default riskDown1-4wDistress in private debt spilling into high-yield credit pricing metrics.

    Does this development affect your holdings?

    Enter your holdings to check them against this and other recent developments, review the decision that matters most, then set a monitor.

    Check this development against my holdings

    Review your initial audit before choosing ongoing portfolio scanning at $79/month.

    What happened next

    AssetCallBase close+1 day+5 days+20 days
    HYGDownagreed78.60 2026-09-11-0.09%-0.09%Pending

    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.

    Related

    Check this development against my holdings

    See today's live cards

    Public pages are published 24 hours after the product shows them. Desk shows every catalyst, event and causal reading as it happens, mapped to your holdings.

    Open Desk — $399/month