Viewpoint: U.S. Private Credit Risk Increases, Leading Institutions Like BlackRock Face Redemption Pressure, Potentially Leading to High-Risk Credit Events

Odaily According to a post by crypto KOL Phyrex Ni on platform X, risks in the U.S. private credit market have recently begun to surface, with specific manifestations as follows:

1. BlackRock's HPS Corporate Lending Fund (approximately $26 billion in size) received redemption requests for about 9.3% of its fund shares in Q1 2026, amounting to roughly $1.2 billion. The fund's original quarterly repurchase limit was 5%. This is the first time the liquidity cap has been triggered, with approximately $620 million actually available for redemption.

2. Blackstone's BCRED received redemption requests for about 7.9% of its fund shares in the same quarter, amounting to roughly $3.7 billion. Blackstone raised the repurchase limit from 5% to 7% and injected approximately $400 million of its own internal capital, with over $150 million coming from executives and senior employees.

3. Blue Owl's OBDC II, with a size of about $1.6 billion, is also facing redemption pressure. The fund sold approximately $1.4 billion in assets to North American pension and insurance institutions and changed its original quarterly 5% redemption framework to a maximum return arrangement of about 30%, involving around 128 companies across 27 industries.

4. Fitch data from February shows that the average redemption rate for the perpetual non-listed BDCs it tracks rose to 4.5% of NAV in Q4 2025, a significant increase from 1.6% in the previous quarter, indicating that capital withdrawal pressure has spread throughout the retail private credit channel.

5. Institutional protective put positions on credit ETFs have surged to historical highs, showing that institutions are hedging against underlying borrower repayment capacity, the authenticity of book valuations, and redemption feasibility.

6. Persistently high interest rates and the slow pace of Fed rate cuts are increasing refinancing difficulties, leading to greater default risks and widening credit spreads in private credit.

7. AI infrastructure may also be impacted. As credit conditions tighten, financing costs for data centers, servers, and supporting networks will rise, expansion pace will slow, and financing pressure for AI-related projects will increase. S&P Global Ratings has listed "AI-driven tech debt issuance, AI valuation risks, and rising leverage among non-bank institutions" as key variables for credit market liquidity in 2026.

Overall, private credit liquidity strain has already manifested in several large funds. If the high-interest-rate environment persists, redemption pressure and default risks may further intensify.