US Private Credit Defaults Broaden Across Sectors, Rises to 5.7%
Fitch Ratings’ U.S. Private Credit Default Rate (PCDR) increased to 5.7% for the TTM ending November 2025, up from 5.2% in October.
This is the highest since February 2025. The PCDR comprises two components: the Model-based Credit Opinion (MCO) default rate and the Privately Monitored Rating (PMR) default rate.
In November, the MCO default rate increased to 4.6% from 4.3%, while the PMR default rate jumped to 9.3% from 7.7%. Default activity rose sharply across the PCDR universe in November. Fitch recorded 13 default events, more than double the year to date monthly average of 5.5.
Default events broadened beyond historically high-defaulting sectors, with 10 of 29 sectors logging at least one event. In November, the industrial and manufacturing, building and materials, and broadcasting and media sectors each posted two default events.
The PMR component drove the PCDR increase. It added five default events across five new unique defaulters in November, each in a different sector, while no unique defaulter rolled out of the TTM period.
TTM totals rose to 28 unique defaulters and 39 default events. In the MCO component, Fitch recorded eight default events from four new unique defaulters and four serial defaulters, lifting TTM totals to 45 unique defaulters with 52 default events.
In November, Fitch recorded 13 default events in the PCDR from nine new unique defaulters and four serial defaulters. Serial defaulters default multiple times within a TTM period and count once in the reported TTM default rate.
Of the 13 default events, nine introduced payment-in-kind (PIK) interest in lieu of cash interest, three involved stressed maturity extensions, and one stemmed from an uncured payment default. Over the November TTM period, 73 unique defaulters generated 91 default events in the PCDR.
Over the November TTM period, interest payment deferrals and the introduction of PIK in lieu of cash interest drove 59% of total default events. Stressed maturity extensions represented 25%, and uncured payment defaults made up 9%.
The remaining 7% involved bankruptcies, liquidations, and debt-equity swaps or out-of-court restructurings where sponsors exited investments.
Smaller issuers continue to post higher default rates. For the November TTM period, companies in the PCDR with up to $25 million EBITDA recorded a default rate of 12.9%, compared to 4.2% for mid-sized peers with $25 million – $50 million of EBITDA. CBN to Hike Rates on Treasury Bills after Bonds Repricing
