It's been a tough year at the large end of private credit

Sign into KBRA DLD to download the latest US Monthly Jumbos & Steals Report. Not a client? Contact [email protected] to trial our news & research!

Jumbo volume in the first half totaled just $14.6 billion and is on track for the lowest annual total since KBRA DLD launched in 2019.

Several issues are challenging managers that underwrite >$1 billion private loans including: 1) competitive pricing in liquid markets, 2) capital management due to retail outflows and 3) scrutiny in the software sector, which accounts for nearly 43% of historical jumbo volume.

June capped a weak second-quarter, with volume reaching only $2.7 billion, the lowest quarterly total in three years.

Large private financings skewed toward LBOs in the first half. In fact, buyouts accounted for all jumbo issuance in the second quarter and 44% of first-half business, including June’s sole financing. Sponsors looking to refinance and execute opportunistic transactions — two drivers of volume in 2023 and 2024 — are finding better terms in the syndicated loan market.

In June, average spreads in public and private markets moved similarly, leaving the private premium steady, at 199 bps.

Like overall jumbo volume, steals activity is weaker in 2026. KBRA DLD tracked only about $9 billion in visible steal volume in the first half. The good news: Credit quality improved. For the first time, none of this year’s deals carried full Triple-C ratings previously. —Kelly Thompson