Record assessment activity covering nearly 1,000 companies in Q2 2026 provides KBRA’s broadest view yet of the direct lending middle market (MM). This quarter’s data show that median fundamentals remain stable, but the pace of credit quality improvement has slowed.
KBRA primarily attributes this trend to slowing EBITDA growth, with Q2 2026 recording the largest quarter-over-quarter (QoQ) decline on record. Alongside accumulating macroeconomic headwinds (see Private Credit: Q1 2026 Middle Market Compendium: Stability Despite March Madness), we believe EBITDA growth is becoming less effective in supporting credit quality for borrowers at the margins (see Private Credit:…
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