UBS Warns Private Credit Defaults Could Surge

UBS strategists on Feb. 25, 2026 said private-credit default rates could surge to 15% if rapid AI disruption hits corporate borrowers. The report cites current defaults of 3–5%, rising interest paid-in-kind levels, and fallout from Blue Owl’s fund closure that wiped $2.4 billion in market value and prompted large BDC asset sales. UBS warns strain could spill into leveraged loans and high-yield bonds.
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