Despite concerns about private credit’s exposure to software and macroeconomic volatility, there has been no corresponding deterioration in default rates, according to analysts at S&P Global Ratings.

Over the past year, persistent inflationary and supply-side shocks have created an uncertain macroeconomic backdrop for private credit managers. Adding another layer of uncertainty is the potential for the growth of AI to disrupt the software sector, to which private credit has significant exposure.

These factors and broader uncertainty are also weighing on private credit deal activity, with a slowdown in mergers and acquisitions (M&A) persisting, although some in the industry have reported an uptick in activity in recent weeks.

Speaking to Alternative Credit Investor, Evan Gunter, head of private markets research at S&P Global Ratings, said the potential for AI-related disruption, particularly in the software industry, has continued to be a “question that’s been overhanging the [private credit] market”.

However, despite these concerns, “even with all of these supply-side shocks and uncertainty related to AI, we have not seen a commensurate decline or uptick in defaults”.

According to S&P Global Ratings data, the US default rate for credit estimates fell to 3.9 per cent at the end of June 2026, from 5.3 per cent at the beginning of the year. By comparison, the US speculative-grade default rate was 3.7 per cent at the end of 2025 and remained at that level at the end of June.

Read more: Managers hunt for software winners and losers amid AI panic

On the macroeconomic outlook, inflation will continue to pose a challenge amid a “never-ending succession of supply-side shocks”, while the indirect effects of events in the Middle East on inflation are “only just beginning” to be felt, said Sylvain Broyer, chief EMEA economist at S&P Global Ratings.

Broyer said he expects the European Central Bank and the Federal Reserve Board to hike rates at some point later this year. Despite the potential for further rate rises, he said he thinks markets are “more or less at peak” for long-term interest rates, assuming there is no further major shock.

Against this backdrop, Gunter said S&P expects the US speculative-grade default rate to remain broadly stable at around four per cent by March 2027.

Read more: Private credit could get ‘boost’ from higher rates despite software concerns