US Private Credit Monitor, July 2026 (PitchBook / NVCA)

Summary

• Over the past three months, estimated direct lending volume to sponsor-backed companies recovered to $25 billion, the second-lowest total since Q3 2023.p.2
• Direct lenders provided roughly $12 billion of buyout financing over the past three months, with deal count at its weakest since Q3 2023.p.2
• By March 2026, BDCs held 538 borrowers showing credit pressure, up 15% from 467 in December 2025.p.2
• The BSL-direct lending spread differential narrows to 146 bps YTD, the narrowest since 2019.p.15
• The BSL-direct lending spread gap widens to 166 bps over the past three months, up 7 bps from Q2.p.16
• The 450-499 bps range dominates the new-issue LBO spread distribution, up 5% from 2025 levels.p.13
• Healthcare's share of new-issue direct lending deal count climbs 2% YTD versus 2025 levels.p.11

Key insights

1. Software is the most stressed cohort among BDC borrowers as managers brace for AI-driven disruption.p.2
2. Half of the stressed borrowers continue paying interest entirely in cash, though new PIK additions have eased from prior years.p.2
3. Direct lending LBO count is at its lowest level since Q3 2023, yet remains well above BSL.p.18
4. Direct lending's share of global buyouts over $1B declines from 2025, while BSL share rises and hybrid financings rebound.p.22
5. Two-thirds of unitranche spreads held by BDCs cluster in the 450-550 bps range.p.25
6. BDC-held loan yields are at lows since Q2 2022, when Fed rate hikes picked up steam.p.30
7. Spreads for B-minus borrowers have tightened across both the direct lending and BSL markets.p.14
8. The largest share of the BDC maturity wall now falls in 2031 or later.p.28
9. BDC analysis is based on quarterly filings of over 100 BDC portfolios tracked by PitchBook LCD.p.40