The $1.8 trillion private credit market is facing renewed refinancing stress as
loans issued during the low-rate period—especially in 2021–22—come due. Steve
Kupenheimer, partner and head of private investments at Lord, Abbett & Co., said
loans underwritten and priced when benchmark interest rates were near zero are
most exposed; as that cohort matures borrowers will face greater refinancing
pressure and higher default risk. Kupenheimer said he believes we are in a
relatively elevated default cycle, with current default rates around 3–4% versus
roughly a 2% historical average.
