• Houlihan Lokey flagged a sharp rise in stress among the smallest private credit borrowers, with loans below 90% of par jumping since 2023.
• For borrowers with $10 million-$20 million of EBITDA, sub-90% valuations rose to 12% from roughly 1% in 2023.
• Stress spread to the $20 million-$100 million EBITDA cohort, with 6% of loans below 90% of par, a three-year high.
• Defaults for borrowers under $100 million of EBITDA ran at 3% size-weighted, far above the 0.8% rate across the full market.
• PIK usage stayed modest, with 11.8% of loans electing PIK; amended PIK represented 1.6% of interest dollars.

Disclaimer: This news brief was created by Public Technologies (PUBT) using generative artificial intelligence. While PUBT strives to provide accurate and timely information, this AI-generated content is for informational purposes only and should not be interpreted as financial, investment, or legal advice. Houlihan Lokey Inc. published the original content used to generate this news brief via Business Wire (Ref. ID: 202609101100BIZWIRE_USPR_____20260910_BW846005) on September 10, 2026, and is solely responsible for the information contained therein.