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It’s difficult to gauge the health of the notoriously opaque private credit market.

In an era of higher base rates and macro economic uncertainty, there has been an expectation that a meaningful amount of distress in private credit must be happening. Yet the reported defaults remain lower than what people have expected.

Kipp deVeer director and chief executive of Ares Capital Corporation said as much on the lender’s most recent earnings call. “There was a belief that defaults, nonaccruals everywhere would rise much more quickly than they have.”