The US private credit default rate fell for the second consecutive quarter in the three months to September 2026, according to new data from Proskauer.

The law firm’s latest Private Credit Default Index, which tracks senior-secured and unitranche loans in the US, recorded a default rate of 2.41 per cent in the third quarter, down from 2.51 per cent in the previous three months.

The index covered 746 loans representing $205.7bn (£154bn) in original principal amount.

However, Proskauer warned that the headline decline masked signs of pressure in parts of the market, with trailing 12-month defaults rising and defaults among software and technology borrowers increasing.

Default rates also varied according to borrower size. Among companies with earnings before interest, tax, depreciation and amortisation (EBITDA) of less than $25m, the default rate rose from 1.9 per cent in the second quarter to 2.2 per cent in the third quarter.

For borrowers with EBITDA between $25m and $49.9m, the rate edged down from 3.4 per cent to 3.3 per cent over the same period. Meanwhile, larger borrowers with EBITDA of at least $50m saw their default rate fall from 2.4 per cent to 1.7 per cent.

“The decline in the overall default rate for a second consecutive quarter points to continued resilience of the private credit market,” said Stephen Boyko, partner and co-founder of Proskauer’s private credit group.

“However, the headline number doesn’t tell the whole story. Trailing 12-month defaults rose, software and technology defaults climbed, and performance varied by sector and borrower size. As credit conditions shift, close portfolio monitoring and early engagement with borrowers matter more than ever.”

The index also tracks historical default trends by industry and borrower size, as well as defaults by loan type, origination year and among covenant-lite loans.

Read more: Private debt returns 1.88pc in Q2 lagging wider private markets