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more room than many other investors to be patient with borrowers when times are tough. During the pandemic direct lenders granted companies more time to pay their obligations, often by negotiating behind the scenes with private equity owners.Most Read from BloombergWhy New York City Has a Fleet of New EVs From a Dead CarmakerNeom’s Desert Ski Resort Strains Saudi Prince’s $1.5 Trillion PlanTrump Takes Second Swing at Cutting Housing Assistance for ImmigrantsChicago Schools Seeks $1 Billion of Short-Term Debt as Cash GoneWe Need a Reality Check on Crime, Safety and TransitBut a number of analysts this month are holding up a light to underlying stress, including from lenders themselves.While there is no universal definition of what constitutes default in private credit, default rates for the market are currently in the 2% to 3% range. If so-called non-accrual loans — those on which lenders expect to book losses — are added to the mix, that rate climbs to 5.4%, according to a JPMorgan Chase & Co. report that’s based on data from KBRA DLD. The adjustment puts the default rate for private credit broadly in line with that observed in the broadly syndicated loan market.Returns above 8% are still luring investment, although private credit funds are not the cash magnet they once were. Fundraising has slowed this year to $70 billion in the period through July 22, accounting for just a tenth of the alternative asset inflows, according to JPMorgan, the smallest share since at least 2015.“Inflows into the asset class meant too much capital was committed far too quickly,” JPMorgan analysts including Stephen Dulake wrote in a report this month. “Underwriting corners were surely cut; and losses will be outsized come the downturn.”Private companies and their lenders have been able to keep payment defaults at bay through payment-in-kind arrangements that allow borrowers to defer cash interest payments until debt comes due, leaving them with one big bill at the end. Another way is by setting covenants at “generous” levels that make it hard to act on early signs of weakness, according to S&P Global analyst Zain Bukhari.“A major selling point of private credit is the low default rates,” Bukhari wrote in a report this month. “This reputation hinges on a narrow definition of default.”Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,466.91 +96.74 (+1.52%)Dow 3045,631.74 +846.24 (+1.89%)Nasdaq21,496.54 +396.22 (+1.88%)Russell 20002,361.95 +87.85 (+3.86%)VIX14.22 -2.38 (-14.34%)Gold3,418.50 +36.90 (+1.09%)PortfolioSign in to access your portfolioSign inTop gainersOPEN Opendoor Technologies Inc. 5.01 +1.41 (+39.17%)UI Ubiquiti Inc. 510.23 +119.66 (+30.64%)MNSO MINISO Group Holding Limited 26.63 +4.46 (+20.12%)RXO RXO, Inc. 16.97 +2.27 (+15.44%)NIO NIO Inc. 6.34 +0.80 (+14.44%)Top losersNEGG Newegg Commerce, Inc. 100.75 -15.03 (-12.98%)BJ BJ's Wholesale Club Holdings, Inc. 97.11 -9.05 (-8.52%)INTU Intuit Inc. 662.66 -35.10 (-5.03%)DUOL Duolingo, Inc. 331.87 -13.65 (-3.95%)CSX CSX Corporation 34.58 -1.29 (-3.60%)Most activeOPEN Opendoor Technologies Inc. 5.01 +1.41 (+39.17%)NIO NIO Inc. 6.34 +0.80 (+14.44%)INTC Intel Corporation 24.80 +1.30 (+5.53%)NVDA NVIDIA Corporation 177.99 +3.01 (+1.72%)LCID Lucid Group, Inc. 2.0300 -0.0600 (-2.87%)Earnings eventsTrending tickersINTC Intel Corporation 24.80 +1.30 (+5.53%)ETH-USD Ethereum USD 4,741.58 +447.46 (+10.42%)OPEN Opendoor Technologies Inc. 5.01 +1.41 (+39.17%)SOL-USD Solana USD 206.46 +23.44 (+12.81%)^GSPC S&P 500 6,466.91 +96.74 (+1.52%)Top economic events