Intelligence Feed event · Credit · 2026-09-12

    Houlihan Lokey Reports Rising Defaults in Smaller Private-Credit Borrowers

    Question

    Houlihan Lokey Reports Rising Defaults in Smaller Private-Credit Borrowers

    Direct answer

    Houlihan Lokey analysis revealed notable divergence in private credit performance based on borrower scale. While large corporate borrowers remain stable, smaller borrowers face escalating credit stress under high interest rates. The $10M-$20M EBITDA tier has deteriorated significantly, with 12% of loans discounted below 90% of par compared to just 1% in 2023, reflecting heightened restructuring risk.

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

    Cite as: Market Ontology, “Houlihan Lokey Reports Rising Defaults in Smaller Private-Credit Borrowers”, revision 1, evidence through 2026-09-12. https://marketontology.com/market-events/2026-09-12/houlihan-lokey-reports-rising-defaults-in-smaller-private-credit-borrowers-cabde7

    CREDIT
    Houlihan Lokey Reports Rising Defaults in Smaller Private-Credit Borrowers
    Houlihan Lokey analysis revealed notable divergence in private credit performance based on borrower scale. While large corporate borrowers remain stable, smaller borrowers face escalating credit stress under high interest rates. The $10M-$20M EBITDA tier has deteriorated significantly, with 12% of loans discounted below 90% of par compared to just 1% in 2023, reflecting heightened restructuring risk.
    HLI
    Impact
    76
    SEP 12
    SIG
    85%
    HLI
    Houlihan Lokey Reports Rising Defaults in Smaller Private-Credit Borrowers
    Houlihan Lokey analysis revealed notable divergence in private credit performance based on borrower scale. While large corporate borrowers remain stable, smaller borrowers face escalating credit stress under high interest rates. The $10M-$20M EBITDA tier has deteriorated significantly, with 12% of loans discounted below 90% of par compared to just 1% in 2023, reflecting heightened restructuring risk.
    → Debt-service strains on floating-rate loans widen credit spreads and impair asset-backed valuations for smaller private-market borrowers.
    Impact
    Houlihan Lokey analysis revealed notable divergence in private credit performance based on borrower scale. While large corporate borrowers remain stable, smaller borrowers face escalating credit stress under high interest rates. The $10M-$20M EBITDA tier has deteriorated significantly, with 12% of loans discounted below 90% of par compared to just 1% in 2023, reflecting heightened restructuring risk.
    Affected
    HLI
    Transmission
    Debt-service strains on floating-rate loans widen credit spreads and impair asset-backed valuations for smaller private-market borrowers.

    How this development reaches the affected companies

    AssetExposure and channelDirectionEvidence
    HLIrestructuring advisory fee revenue expansion vs credit market slowdownMixed1-4wHoulihan Lokey reports rising private credit stress concentrated among smaller borrowers.

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    What happened next

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