The Alternative Credit Council's latest quarterly health check finds private credit valuations broadly stable and borrowers still able to service their debt, with stress concentrated in a few pockets rather than spreading across the market, a read APAC family offices and institutional allocators, increasingly exposed to global private credit and BDCs, will want to understand before adding to positions.

TL;DR

  • The ACC's Q2 2026 Quarterly Market Update (16 September 2026) found 85% of loans valued above 97% of par, borrower earnings still growing, and BDC performance recovering after a rough first quarter, but flagged smaller borrowers and software companies as areas to watch.
  • This is a global, US-weighted dataset, not an APAC-specific study, but APAC investors are relevant end-buyers of the same private credit funds and BDCs it tracks, and the region's own private credit market is separately projected to grow from US$59 billion (2024) to US$92 billion by 2027.
  • Nothing in the data points to a sector-wide credit event; the ACC itself frames this as "not an all-clear," with specific metrics worth watching rather than a broad reassurance.

What did the Alternative Credit Council's Q2 2026 report find?

On 16 September 2026, the Alternative Credit Council, the global body for the private credit fund industry, operating under the Alternative Investment Management Association (AIMA), published its Q2 2026 Quarterly Market Update. The report draws on investment bank Houlihan Lokey's database of more than 80,000 loan valuations, tracking borrower earnings, debt servicing, and portfolio performance across the private credit market.

The headline finding: 85% of loans in the dataset are valued above 97% of par, a level the ACC characterises as broadly healthy. The share of loans valued below 90% of par edged up from a range of 5–7%, but that cohort remains concentrated in identifiable pockets, specifically software companies and smaller borrowers, rather than spreading across the market.

Is credit stress spreading, or is it contained to a few pockets?

The data says contained, for now. Median borrower revenues rose 6.5% year-on-year and median EBITDA rose 7.4%, extending a period of margin expansion the ACC has tracked since September 2023. Amended PIK (payment-in-kind) interest, where a borrower pays interest with more debt instead of cash, often an early stress signal, stayed low at 1.6% of total interest dollars.

Can borrowers still cover their interest payments?

Mostly, yes, though the trend has softened slightly. Median interest coverage, EBITDA divided by interest expense, reached 1.72x, the highest level in the ACC's data series. But the share of borrowers with coverage below 1.00x rose to 14.1% from 13.4%, the first increase in six quarters. That's still well short of the 23.2% peak recorded in December 2023, but it's a metric the ACC says warrants continued attention. Median net leverage held at 4.56x debt-to-EBITDA, and more than 90% of private credit loans are floating-rate, meaning borrower costs move directly with interest rates.

What happened to BDCs, and why does that matter for APAC investors?

Business development companies (BDCs), listed or registered vehicles that lend directly to mid-sized companies and one of the more accessible ways investors get exposure to US private credit, had a bumpy start to 2026 before recovering. The Cliffwater Direct Lending Index, a BDC benchmark, returned 1.89% in the second quarter, with realised losses of just 0.47% over the trailing 12 months. Funding markets stayed open: public BDCs issued $10.3 billion year-to-date, against $5.8 billion over the same period in 2025.

Jiří Král, the ACC's global head, said the BDC rebound suggests that the first-quarter sell-off went further than warranted by credit fundamentals, while cautioning that this is not an all-clear for the sector at large: smaller borrowers and software remain areas to watch.

Why it matters for APAC investors

This dataset is global and Houlihan Lokey-sourced, meaning it skews toward the US market rather than describing APAC private credit directly. But the distinction matters less than it might seem: much of the capital flowing from Asia-Pacific family offices and institutions into private credit goes into exactly these global direct-lending funds and BDC structures, whether through feeder vehicles, wealth platforms, or direct fund commitments.

At the same time, APAC's own private credit market has its own growth story. A separate AIMA/ACC report, published with Simmons and Simmons, EY and Broadridge in November 2025, projected the region's private credit market to grow from US$59 billion in 2024 to US$92 billion by 2027, with wealth investors' share of that AUM rising to 28% by 2027 from 23% in 2020. Singapore was named a regional hub for structuring and origination, alongside growth in Australia, India and Japan. That report also noted the market remains largely sponsorless, about 90% of deals involve borrowers without private-equity backing, a structural difference from the more sponsor-heavy US market the Q2 2026 update largely describes.

Put together, the two reports suggest APAC allocators are expanding into private credit at the same time the asset class's global plumbing is showing early, localised stress signals. Neither report claims those two facts cancel out; they simply sit alongside each other as context for anyone reviewing an allocation this quarter.

What isn't confirmed yet

The ACC's update does not say whether APAC-domiciled private credit funds or borrowers show the same leverage and coverage patterns as the largely US-weighted Houlihan Lokey dataset, that comparison has not been published. Nor does either report make a forecast about where credit spreads or default rates go next; the ACC frames its release as a snapshot, not a prediction. This article does not offer guidance on whether to add to, hold, or reduce any private credit allocation; that judgment depends on an investor's own mandate, currency exposure and liquidity needs.

Frequently Asked Questions

Is private credit in trouble right now?

No. The ACC's Q2 2026 data show valuations broadly stable, with 85% of loans priced above 97% of par. Stress is concentrated in software companies and smaller borrowers, not spread across the market.

What is a business development company (BDC), and why is it in this story?

A BDC is a listed or registered vehicle that lends to mid-sized companies. It's one of the more accessible structures through which investors, including those based in APAC, gain exposure to US private credit, which is why the ACC tracks BDC performance as part of its quarterly health check.

Does this report cover APAC's own private credit market directly?

Not directly. The Q2 2026 data is global and drawn largely from a US-weighted loan database. APAC's own market dynamics, including its projected growth from US$59 billion to US$92 billion by 2027, come from a separate AIMA/ACC report published in November 2025, referenced here for regional context.

Sources and Method

This article is based on: the Alternative Credit Council's press release, "Private credit's latest health check shows stabilising valuations and resilient borrowers," published 16 September 2026 on aima.org; independent trade-press confirmation of the same data via Finadium's 16 September 2026 report; and AIMA/ACC's press release "Report highlights Asia-Pacific's growing global private credit market," published 4 November 2025 and co-authored with Simmons and Simmons, EY and Broadridge, used for regional structural context. A same-day independent report from Alternative Credit Investor was identified as corroborating coverage but could not be fully retrieved for this draft; no standalone facts are drawn from it. No forecasts, quotes, or figures beyond what these sources state are included.