The default rate for a group of US private debt borrowers rose to a record in August, according to Fitch Ratings. The trailing 12-month private credit default rate across 1,300 borrowers rose to 6.3% at the end of last month, surpassing the previous high of 6.1% in the prior month, said a report released Monday. Fitch also recorded the highest monthly total of private credit default events in the past year.

Private credit defaults continued to rise in August, driven by maturity extension transactions that Fitch deems defaults, as uncertainty around rates and inflation has stifled deal flow making it difficult for sponsors to sell struggling portfolio companies ahead of loan maturities, said Lyle Margolis, Fitch’s head of private credit for North America. There were 14 recorded instances, out of which 11 involved unique defaulters, while three involved serial defaulters, according to the report. Interest payment deferrals and the introduction of payment-in-kind in lieu of cash interest accounted for 47% of the 89 defaults that occurred over the past year.

For the third consecutive month, stress-induced maturity extensions represented the largest share of default events, Fitch said. Maturity extensions under stress accounted for 45% of defaults in August. Looking at industries, the highest default activity was registered by healthcare, industrial and manufacturing.

The sectors each recorded a 9.9% default rate last month, up from 9.5% in July. Despite a software sector slowdown stymied by investor fears tied to artificial intelligence disruption this year, the industry continued to have the lowest default rate among those rated by Fitch. The technology software sector posted a default rate of 0.6%, down from 1.2% the prior month.