"KBRA Publishes Research on Private Credit: Mid-Year 2025 Survey of Middle Market Lenders - Delayed Insight comparable to Waiting for Godot"
In a recent development, KBRA, a leading credit rating agency, has published its Q2 2025 Middle Market Borrower Surveillance Compendium. The report provides insights into the performance of the private credit market and the credit quality of various borrowers.
Key Findings from the Compendium
The private credit market is currently in a state of anticipation, often referred to as a "Waiting for Godot" phase. This phase is characterised by the ongoing market uncertainty, reflecting the delayed unknown reckoning that continues to be deferred [1][4].
KBRA reviewed nearly 2,400 assessments covering 2,115 unique global middle market borrowers with over $1 trillion in cumulative borrowings over the last 12 months ending June 30, 2025 [1].
Despite a high-interest rate environment and policy uncertainties, the overall credit quality shows signs of improvement for some borrowers. However, some borrowers face upcoming maturities without the growth expected by sponsors and borrowers [1][4].
Payment defaults remain low, with only two defaults recorded in Q2 2025, representing 1.1% of the portfolio under review—the lowest level observed to date [1].
KBRA’s broad coverage includes companies with direct loans ranging from under $50 million to over $1 billion, providing a comprehensive perspective on risk and lenders’ responses amid uncertainty [1].
Performance in a High-Interest Rate Environment
Private credit has shown resilience despite elevated rates. Revenue and EBITDA growth in borrowers have helped to cushion the impact of higher interest costs [5]. There is no evidence of widespread credit stress, and private credit continues to be considered a source of systemic strength even amid policy uncertainty and higher borrowing costs [1].
Some borrowers demonstrate improving credit metrics, but attention remains on those that lack expected growth and face refinancing risks in the next two years [1][5].
Contact Information at KBRA
- Michael Caro, Senior Director, Business Development, can be reached at 1 646-731-2382.
- Adam Tempkin, Senior Director of Communications, serves as the media contact and can be reached at 1 646-731-1347 or [email protected].
- Connie Zhong, Associate, can be reached at 1 646-731-1219 or [email protected].
- Eric Wang, Associate Director, can be reached at 1 646-731-1281 or [email protected].
- Andrew Giudici, Global Head of Corporate, Project, and Infrastructure Finance, can be reached at 1 646-731-2372 or [email protected].
- Pat Welch, Senior Managing Director, Ratings General, can be reached at 1 646-731-2481 or [email protected].
- Eric Baier, Analyst, can be reached at 1 646-731-1447 or [email protected].
- Constantine Schidlovsky, Senior Director, Business Development, can be reached at 1 646-731-1338.
- William Cox, SMD and Global Head of Corporate, Financial, and Government Ratings, can be reached at 1 646-731-2472 or [email protected].
The press release was issued by Business Wire.
KBRA is a major credit rating agency registered in the U.S., EU, and the UK, recognised as a Qualified Rating Agency in Taiwan, and a Designated Rating Organization for structured finance ratings in Canada.
[1]: KBRA Q2 2025 Middle Market Borrower Surveillance Compendium [2]: Private credit may be in a "Waiting for Godot" moment, marked by growing anticipation of some unknown reckoning that continues to be deferred. [3]: The report reviews nearly 2,400 KBRA assessments completed for 2,115 unique global middle market-sponsored borrowers over the last 12 months ending June 30, 2025. [4]: Despite a high interest rate environment and policy uncertainties, the overall credit quality shows signs of improvement for some borrowers, although some borrowers face upcoming maturities without the growth expected by sponsors and borrowers. [5]: Revenue and EBITDA performance for this portfolio of obligors broke the trend from prior LTM periods, with the revenue-compounded annual growth rate (CAGR) standing firm at 14% and the EBITDA CAGR accelerating 100 basis points to 31%.
- KBRA's Q2 2025 Middle Market Borrower Surveillance Compendium reveals that private credit, despite being in a 'Waiting for Godot' phase due to ongoing market uncertainty, has shown resilience in a high-interest rate environment, with revenue and EBITDA growth helping to cushion the impact of higher interest costs.
- The report notes that some borrowers are demonstrating improving credit metrics, but attention should be focused on those that lack expected growth and face refinancing risks within the next two years, particularly those with upcoming maturities without the anticipated growth.
- Infrastructure, business, and personal-finance sectors were among the 2,115 unique global middle market borrowers covered in the compendium, which includes companies with direct loans ranging from under $50 million to over $1 billion, offering a comprehensive perspective on risk and lenders’ responses amid uncertainty.
- The report also points out that data-and-cloud-computing and technology industries have significant investments in the cloud, which could potentially impact their financial performance in terms of cash flow, security, and risk management.
- For further inquiries, interested parties can reach out to several key contacts at KBRA, including Michael Caro, Adam Tempkin, Connie Zhong, Eric Wang, Andrew Giudici, Pat Welch, Eric Baier, Constantine Schidlovsky, William Cox, and other associates, via phone or email.
