KBRA Publishes Report on Middle Market Private Credit: Surveillance Collection for Q2 2025 - A Wait for 'Waiting for Godot'
KBRA Q2 2025 Middle Market Borrower Surveillance Compendium Released
The KBRA Q2 2025 Middle Market Borrower Surveillance Compendium has been published, offering insights into the current state of the private credit market. The report, issued by Business Wire, describes the market as being in a "Waiting for Godot" moment—characterized by growing anticipation of an unknown reckoning that keeps being delayed.
The compendium analyzed nearly 2,400 KBRA borrower assessments over the last 12 months ending June 30, 2025, covering 2,115 unique global middle market sponsored borrowers with cumulative borrowings over $1 trillion. The assessments ranged from over 200 companies with direct loans exceeding $1 billion to nearly 200 companies with loans under $50 million, demonstrating KBRA's comprehensive coverage across different borrower sizes.
Despite ongoing market uncertainties, the report notes signs of improving credit quality for some borrowers, alongside a subset facing upcoming debt maturities without the growth initially expected. While pockets of underperformance exist, there is little evidence of widespread credit stress in the private credit space despite elevated interest rates and policy uncertainty.
The report captures evolving credit quality trends by company size and sector and provides insight into lenders' responses amid ongoing market challenges. Notably, the upgrade-to-downgrade ratio for the 371 companies assessed in Q2 showed a significant improvement compared to the prior three quarters.
Revenue and EBITDA performance for the portfolio of obligors improved in Q2 2025, with the revenue compounded annual growth rate standing firm at 14% and the EBITDA CAGR accelerating 100 basis points to 31%.
For media enquiries, Adam Tempkin, Senior Director of Communications, can be reached at 1 646-731-1347 or [email protected]. For business development inquiries, Constantine Schidlovsky, Senior Director, can be reached at 1 646-731-1338 or [email protected]. For ratings-related enquiries, William Cox, SMD, Global Head of Corporate, Financial and Government Ratings, can be contacted at 1 646-731-2472 or [email protected]. Eric Wang, Associate Director, can be contacted at 1 646-731-1281 or [email protected]. For general enquiries, Pat Welch, Senior Managing Director, Ratings General, can be contacted at 1 646-731-2481 or [email protected]. Michael Caro, Senior Director, is another business development contact and can be reached at 1 646-731-2382 or [email protected]. Connie Zhong, Associate, can be contacted at 1 646-731-1219 or [email protected].
KBRA is a major credit rating agency registered in the U.S., EU, and the UK, and recognized as a Qualified Rating Agency in Taiwan and a Designated Rating Organization for structured finance ratings in Canada. The private credit market remains resilient, with improving credit quality for many borrowers but also caution regarding those with looming maturities amid uncertain growth prospects. The industry appears to be in a holding pattern, awaiting clearer signals of risk or recovery.
[1] KBRA Q2 2025 Middle Market Borrower Surveillance Compendium, Business Wire, www.businesswire.com/news/home/20250701005173/en
- The KBRA Q2 2025 Middle Market Borrower Surveillance Compendium, published on Business Wire's website, highlights the current state of the private credit market, with the market waiting for a potential turning point amid ongoing uncertainties.
- The report points out the performance improvement in revenue and EBITDA for many borrowers in Q2 2025, as shown by the compounded annual growth rates of 14% for revenue and 31% for EBITDA.
- According to the compendium, although pockets of underperformance exist, the private credit space shows little evidence of widespread credit stress despite elevated interest rates and policy uncertainties. To learn more about the KBRA's findings and reports, one can reach out to the respective contacts provided in the text.
