Beyond the headlines: The current state of Private Debt
Newsletter Review | October 2025
Private Debt fundamentals remain strong
Industry data continue to point to a healthy debt environment. Proskauer's Private Credit Default Index shows American default rates falling from 2.7% in Q4 2024 to 1.8% in Q2 2025. Among larger companies, defaults were just 0.5%, well below the 2020-2024 average of 1.7%.
Earnings and deal activity indicate resilience
Private company earnings have proven robust despite a volatile macro backdrop. According to UBS, U.S. middle-market firms recorded 5.4% year-over-year earnings growth in Q2 2025, led by technology and healthcare sectors.
Meanwhile, M&A activity has rebounded by 13% in value and 16% in deal count, creating new opportunities for lenders. With leverage levels broadly stable at~5x EBITDA and interest coverage ratios above 1.5x, the borrower base remains sound.
Private Debt shows tight covenants in loan issuance
Top-tier fund managers tend to focus on first-lien, senior-secured structures with tight documentation, frequent reporting, and active borrower engagement.
A clear sign of investor protection and disciplined investing among leading Private Debt firms is that 70% of issuances in 2024 included strict covenants, compared with 10% in the public syndicated loan market.
iAccess Partners works with a select group of leading global Private Markets managers. Our fund pipeline is continuously expanded, with several new investment opportunities launched each year.
