What Is Private Credit? The 2026 Crisis Test in SEC Filings

Private credit, in the Federal Reserve's own words

“Private credit” is a market label, not a type of fund you can look up on EDGAR, and the funds that sell it use it loosely. The closest thing to an official definition comes from the Federal Reserve, which has written about the market in two documents worth reading in full.

The first is a FEDS Note published on February 23, 2024, “Private Credit: Characteristics and Risks.” It describes the asset by who lends and to whom: “Private credit or private debt investments are debt-like, non-publicly traded instruments provided by non-bank entities, such as private credit funds or business development companies (BDCs), to fund private businesses.” It adds that the borrowers are typically middle-market firms with annual revenues between $10 million and $1 billion, and that the terms are negotiated one-to-one rather than sold to many bond buyers.

The second is the Fed's Financial Stability Report of May 2026, which gave private credit its own box (Box 4.1, “Developments in Private Credit”). Its definition is shorter: private credit is “loans originated by nonbanks that are negotiated on a bilateral basis between borrowers and lenders.” The same report notes that private credit consists of loans to businesses from nonbank lenders such as private credit funds and BDCs. Three things follow from those two definitions, in our reading: it is debt, not equity; the lender is not a bank; and there is no public market for the loan, so its price is an estimate made by the lender.

The sizes the Fed has published, with their dates:

Source: Federal Reserve Board, FEDS Notes, “Private Credit: Characteristics and Risks,” February 23, 2024; Financial Stability Report, May 2026, Box 4.1. The 2024 and 2026 totals are built differently (the 2026 figure is based on invested capital of North America-focused private debt funds plus BDC and credit interval fund assets), so they are not a growth rate.

The last row is the one that matters to an individual. Private credit was historically raised from institutions through private debt funds that, in the Fed's words, are “locked up from 7 to 10 years and do not offer investors an option to redeem their capital.” The roughly one-fifth now held in semi-liquid funds sits in two wrappers that sell shares continuously and offer a partial way out each quarter; the other door for an individual is a BDC listed on an exchange.

The part you can actually buy: what the SEC data shows

Every BDC tags its balance sheet in XBRL, and the SEC republishes those tags as the monthly BDC Data Sets. We took every Form 10-Q or 10-K for a period ending June 30 in 2024, 2025 and 2026 and sorted each filer by its EDGAR record: listed if it trades on the NYSE or Nasdaq, non-traded if not listed and it has filed a prospectus (Form 424B) or a tender offer (Schedule TO-I) since January 2025, private if neither.

Source: SEC BDC Data Sets, files 2024q3, 2025q3 and 2026_07 to 2026_09 (Forms 10-Q and 10-K, period ended June 30), and EDGAR submissions records, retrieved October 11, 2026. Sums are our arithmetic; the kind of each fund is its status today, applied to all three years. Script and per-fund output in the dataset sources.

Three readings. Non-traded BDCs are now the main door: 61.7% of all BDC net assets (our arithmetic), and the fastest growing, although growth slowed from 56.8% in the year to June 2025 to 15.1% in the year to June 2026. The listed BDCs shrank slightly in the last year, from $81.49B to $78.09B of net assets. And the total is a fraction of the market: $574.93B of BDC assets against the Fed's estimate of about $1.4 trillion of private credit loans, because most direct lending is done by institutional funds that file nothing public.

Our count confirms the census in our BDC guide, which lists 181 BDCs with $576.20B of assets: it adds Saratoga Investment, whose quarter ends August 31, and Equus Total Return, read from its text because its XBRL is not in the data sets. The non-traded ($175.17B) and private ($28.79B) totals match to the dollar.

The other wrapper is the interval fund, a closed-end fund that must offer to buy back at least 5% of its shares every quarter. The Fed counts $80 billion of net assets in credit interval funds; ours are listed in the interval fund guide. The 28 largest funds of both kinds, with fees, minimums and distribution rates, are compared in private credit funds 2026.

Is there a private credit crisis? Four tests in the filings

Most answers to the “private credit crisis” question are opinions. A BDC's quarterly report contains four numbers that let you test the claim yourself: what the loans are now worth, how many have stopped paying, how much interest is paid in more debt instead of cash, and how many holders want out.

Test 1: loan values. Markdowns ate two-thirds of income

A BDC's “net increase in net assets resulting from operations” is its net investment income (interest and fees, minus expenses) plus or minus realized and unrealized gains and losses on its loans. The gap between the two is the change in what the portfolio is worth. Across every BDC that tags both figures in XBRL:

Source: SEC BDC Data Sets (XBRL tags NetInvestmentIncome and NetIncomeLoss, six months to June 30). Gain or loss is our arithmetic: net increase in net assets from operations minus net investment income. BDCs with a fiscal year that does not end in December (for example Golub's, which ends September 30) report nine months at June 30 and are not in these rows.

The jump is the clearest signal in the data. In the first half of 2026, BDCs gave back $7.00B on the value of their investments, more than four times the $1.64B of the first half of 2025 (our arithmetic). The largest single case is Blackstone Private Credit Fund: its 10-Q shows $1,998.9M of net investment income after tax and $1,954.0M of net realized and unrealized losses, for a net increase from operations of $44.8M in six months, while it paid $2,258.9M of distributions. Its Class I total return for the half year was 0.2%, against 4.3% in the first half of 2025.

The Fed's May 2026 report gives one reason: since the middle of 2025, investor sentiment had turned negative after some high-profile corporate defaults and worries that artificial intelligence could disrupt software companies, which the report calls the largest sector in private credit portfolios.

Test 2: defaults. What a “default rate” is in a BDC filing

There is no standard private credit default rate in SEC filings. What a BDC reports is non-accruals: loans on which it has stopped booking interest because it doubts it will be paid. Apollo Debt Solutions' 10-Q describes the trigger in the usual words: loans go on non-accrual when there is “reasonable doubt” that principal or interest will be collected. Measured at cost, at June 30, 2026: Golub Capital Private Credit Fund 0.1%, Blue Owl Credit Income 0.3% (0.6% at December 31, 2025), Ares Strategic Income 0.3% (none in December), Apollo Debt Solutions 0.8% (0.8%), HPS Corporate Lending 1.27% of debt and income-producing investments (1.08%), and Blackstone Private Credit Fund 2.2%, up from 0.6% six months earlier. At fair value the same loans are worth less: BCRED's 2.2% at cost is 1.1% at fair value.

Those are low numbers by the standard of any loan book, and the Fed reads them the same way: in May 2026 it wrote that “in private credit markets, loan defaults remained at relatively low levels, but the elevated usage of payment-in-kind (PIK) provisions indicates some borrowers may face repayment difficulties.” The caution is in the direction: BCRED's rate nearly quadrupled in six months.

Test 3: payment in kind. Steady in the aggregate

PIK interest is interest a borrower pays by adding to its loan instead of paying cash. It is legitimate when agreed at the start and a warning sign when a struggling borrower switches to it. Comparing the same BDCs in both years removes the effect of new funds entering the sample:

Source: SEC BDC Data Sets (XBRL tags for PIK interest income and total investment income, six months to June 30); our arithmetic. Funds that report PIK only in their text, such as BCRED and HPS Corporate Lending, are not in the panel.

The aggregate did not rise. It moved up at the non-traded BDCs, from 4.18% to 4.55% of income, and some funds are higher: at BCRED, PIK interest from all its investment categories was $216.2M of $3,723.0M of total investment income in the first half of 2026 (our sum from its 10-Q), about 5.8%. The Fed's word for PIK usage is “elevated”; the filings show it high but not climbing across the industry.

Test 4: the exit. Requests ran at two to three times the cap

A non-traded BDC lets holders out through a quarterly tender offer, normally for about 5% of its shares. When more is tendered, everyone is cut back pro rata. Each fund reports the shares tendered in a final Schedule TO-I/A; we divided them by the shares outstanding at the quarter-end before the offer closed, from the funds' own XBRL:

Source: each fund's final Schedule TO-I/A for the offer (28 filings, accession numbers in the dataset); shares outstanding at the prior quarter-end from each fund's XBRL (us-gaap CommonStockSharesOutstanding). Requests as a share of the fund and the share paid where the filing does not state it are our arithmetic. Offers are grouped by the month they closed: BCRED and HPS Corporate Lending close earlier in the quarter (for example May 29 and June 8, 2026) than Apollo Debt Solutions and Ares Strategic Income (June 15 and June 18, 2026).

Requests were about 1% to 2% of shares through mid-2025, roughly doubled in the December 2025 round, and reached two to three times the 5% cap in the first half of 2026. Blue Owl Credit Income Corp. reports the ratio itself: tenders equal to 21.9% of its shares in the offer that closed March 31, 2026 and 18.8% in the one that closed June 30, of which it bought 22.822% and 26.6%.

BCRED avoided proration once, in March 2026, by raising the offer. Its amendment of March 2, 2026 says: “The Board elected to upsize the offer to 7% of shares, the maximum amount permitted without changing the terms of the repurchase offer.” The same filing says Blackstone employees invested about $150 million and the firm about $250 million in an existing BCRED feeder fund. In the next offer, which closed May 29, 2026, it accepted 93,100,272 of 191,782,834 shares tendered.

The Fed saw the same turn from the other side. Its May 2026 report says redemption requests rose in the fourth quarter of 2025 and accelerated in the first quarter of 2026, and that accepted redemptions exceeded new money coming into perpetual BDCs for the first time since these vehicles were created. It also judged that, for the ten largest, available bank credit and cash could cover at least three quarters of net redemptions at the 5% level, and that “risks to financial stability from further redemption requests appear limited and manageable.” That is a statement about the banking system, not about whether a given holder gets paid.

Six large non-traded BDCs, first half of 2026

The fund-level numbers, each from the fund's own 10-Q for June 30, 2026:

Source: Form 10-Q for June 30, 2026 of each fund (BCRED 0001803498-26-000048, OCIC 0001812554-26-000047, ADS 0001193125-26-341358, HLEND 0001628280-26-056772, ASIF 0001628280-26-054923, GCRED 0001930087-26-000099); net assets from the SEC BDC Data Sets; latest tender from the Schedule TO-I/A filings above. NAV changes are our arithmetic. GCRED's fiscal year ends September 30, so its return covers nine months. ASIF's 10-Q reports 1.00% for Class I in the first half of 2026 but defines total return there as the change in NAV divided by beginning NAV, which does not match its own NAV figures, so we leave it out.

Every one of the six lost NAV per share in the first half of 2026, by 2.3% to 4.6%, and every one that reports a comparable half-year return earned roughly half or less of what it earned a year earlier. Distributions held up better than NAV, which is how a fund can show a positive total return while its share price falls. For the full quarter-by-quarter record of each fund, see BCRED, Blue Owl Credit Income, Apollo Debt Solutions, HPS Corporate Lending, Ares Strategic Income and Golub's GCRED.

The verdict: an exit and valuation squeeze, not yet a default wave

Put the four tests together and the filings answer the crisis question more precisely than the headlines do (our reading):

• Not a credit collapse, so far. Non-accruals at the large non-traded BDCs are between 0.1% and 2.2% of cost, PIK income is flat across the same 74 BDCs, and the Fed describes private credit defaults as low.
• A real hit to value. BDCs wrote down $7.00B in six months, 3.11% of their net assets, and gave up about two-thirds of their income doing it. Holders of the six large non-traded funds saw NAV per share fall 2.3% to 4.6% in the half year.
• A liquidity problem for the retail wrappers. Requests to sell went from about 1% to 2% of shares a quarter in early 2025 to between 7% and 22% in the first half of 2026. Every large non-traded BDC we checked paid only part of what was asked in the second quarter of 2026, and unpaid requests do not roll over: Ares Strategic Income's 10-Q says they “must be resubmitted in the next quarterly repurchase offer.”
• The direction is the risk. BCRED's non-accruals nearly quadrupled in six months, and the Fed's own survey of market contacts named private credit among the most cited risks in spring 2026. A crisis for a holder does not require defaults: it requires needing the money in a quarter when the fund pays 30 cents on each dollar requested.

If you hold six figures in one of these funds, or are deciding whether to put that much in, the decision turns on things this page cannot see: when you will need the money, what else you own, and the taxes on selling.

What a reader can do with this

• Find out which wrapper you own. A listed BDC can be sold today at the market price; a non-traded BDC only in its tender offer; a private BDC not at all until it returns capital. The prospectus or your statement says which.
• Read the last Schedule TO-I/A before buying or adding. It states shares tendered and accepted. If requests are above 5% of shares, expect to be prorated again; plan on several quarters to get out, and tender again each quarter because requests do not carry over.
• Compare net investment income with the net increase in net assets. Both are on the first pages of the 10-Q. When the second is far below the first, the loans are being marked down, and a steady distribution is coming partly out of value.
• Watch non-accruals at cost, not just at fair value. Cost shows how much of the book has stopped paying; fair value already includes the markdown and looks smaller.
• Count the costs that sit outside the headline yield. Ares Strategic Income's 10-Q lists a 1.25% base management fee, 0.95% of incentive fees and 6.13% of interest and credit facility costs as a share of average net assets for Class I in the first half of 2026. Some funds also subtract an early repurchase deduction (BCRED's results pay NAV “less the early repurchase deduction, as applicable”), and several paid tenders with promissory notes settled weeks after the offer closed.

Our private credit pages, and what each one answers

• Private credit funds 2026: the 28 largest funds open to individuals, with minimums, fees and distribution rates.
• Private credit fund redemptions tracker: the latest tender result at each fund, updated as they file.
• What is a BDC and what is an interval fund: the rules behind the two wrappers.
• Fund records: BlackRock Private Credit Fund, Fidelity Private Credit Fund, Barings Private Credit Corp, plus the six linked above.
• Lists: non-traded BDCs and listed BDC stocks.

FAQ

Sources, read and saved on October 11, 2026: Federal Reserve Board, FEDS Notes, “Private Credit: Characteristics and Risks,” February 23, 2024; Financial Stability Report, May 2026 (Box 4.1, “Developments in Private Credit,” and the survey of salient risks) and November 2025; the SEC BDC Data Sets, files 2024q3, 2025q3, 2026_07, 2026_08 and 2026_09 (one accession number per fund in the census output); EDGAR submissions records for the classification of each BDC; XBRL companyfacts for shares outstanding of BCRED, Apollo Debt Solutions, HPS Corporate Lending and Ares Strategic Income; the Form 10-Qs for June 30, 2026 of Blackstone Private Credit Fund, Blue Owl Credit Income Corp., Apollo Debt Solutions BDC, HPS Corporate Lending Fund, Ares Strategic Income Fund and Golub Capital Private Credit Fund; and 31 Schedule TO-I/A filings of those funds from February 2025 to September 2026. Counts, sums, ratios, percentages of shares and the listed, non-traded and private sorting are our arithmetic, with the scripts saved. This is analysis of public documents, not investment, legal or tax advice.