Private credit firms mark down more loans

U.S. private-credit portfolios showed early signs of stabilizing in the second quarter, but loan values remained below reported cost as lenders marked down select software exposures and reported debt that no longer generated income. A Reuters analysis of regulatory filings from 44 business development companies (BDCs) found the combined fair value of their investments was $92.88 billion on June 30, down from $95.19 billion of reported cost or amortized cost. The fair-value-to-cost ratio slipped to 97.57% in the second quarter from 99.25% at end-December, with markdowns concentrated in a relatively small number of borrowers.