Legacy private credit borrowers who piled on debt during low‑rate periods are confronting refinancing pressure as loans from 2021‑22 mature, panelists said at the Milken Asia Summit 2026. Steve Kuppenheimer of Lord, Abbett notes elevated default levels around 3‑4%, above the historic 2%. The $1.8 trillion private credit sector is under scrutiny, with outflows, AI‑disrupted software exposures, and recent failures of Market Financial Solutions, First Brands Group, and Tricolor Holdings raising concerns.
Australia’s regulator has temporarily banned three more private credit products. Apollo’s Brigitte Posch warns that rising rates and falling asset values increase refinancing stress, while Andrew Konopelski of Bridgepoint Credit highlights the difficulty of recovering capital from unsold private equity assets. Despite stress, lenders remain interested as higher rates boost returns and enforce stricter underwriting.
Apollo has funded roughly $8 billion in Asia‑Pacific over the past year, and Posch forecasts trillions more financing needs driven by AI and digital transformation over the next decade.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing