Credit Benchmark: U.S. Corporate Default Risk Rises 54% Over Decade As Private Credit Vulnerabilities Grow

(MENAFN- GlobeNewsWire - Nasdaq) New U.S. Credit Spotlight finds underlying private credit investments deteriorating as AI, tariffs and regulatory reforms reshape credit markets

NEW YORK and LONDON, Oct. 22, 2026 (GLOBE NEWSWIRE) -- Credit Benchmark, a leading provider of consensus credit risk data and analytics, today released its U.S. Credit Spotlight 2026, revealing growing differences in credit risk across U.S. industries, financial institutions and private credit markets.

Drawing on consensus credit risk data from more than 40 global financial institutions, the report reveals a widening gap between Main Street businesses and Wall Street financial institutions, alongside emerging vulnerabilities in private lending and the rapid expansion of AI investment. While corporate default risk has climbed 54% over the past decade, the financial sector has maintained a more stable credit profile, raising questions about how economic pressures are being absorbed across the U.S. financial system.

Against a backdrop of rapid AI investment, trade pressures and evolving bank capital requirements, the report highlights several key findings:

• Corporate credit risk continues to diverge from financial institutions: Average one-year default risk for U.S. corporations has risen from 35 to 54 basis points over the past decade, while financial institutions have remained relatively stable. Both have largely leveled off over the past six months.
• Private credit vulnerabilities are growing: Default risk among underlying loans held by business development companies (BDCs) has deteriorated 10% over the past two years, despite longer-term improvement in BDC-level credit quality.
• AI is creating credit winners and losers: Semiconductor manufacturers and AI infrastructure providers are benefiting from increased investment, while default risk has risen 43% for IT services and consulting companies and 92% for customer experience and business process outsourcing providers over three years.
• Trade pressures are weighing on key industries: Trucking, railroads and chemicals are among the sectors experiencing the greatest deterioration in default risk over the past year, while mining, computer hardware and aerospace and defense have shown improvement.
• Regional credit conditions are diverging: The Rocky Mountain region has the highest average corporate default risk at 66 basis points, approximately 1.7 times that of the Plains region.
• Bank capital reforms could shift lending dynamics: Changes to regulatory capital requirements could alter banks' lending capacity and competitive position relative to private credit providers, with implications for where credit exposure sits across the financial system.
  

“The U.S. credit market isn't moving in one direction, and that's what makes this cycle particularly challenging,” said Michael Crumpler, CEO of Credit Benchmark.“Corporate default risk has risen more than 50% over the past decade, yet financial institutions have remained relatively stable. In private credit, we're seeing a similar disconnect, with underlying borrowers deteriorating even as the funds holding those loans maintain stronger credit profiles. These differences matter because they challenge how investors and lenders assess risk, particularly as AI investment and shifting economic conditions create new pressures across industries.”

Private Credit and AI Reshape the Next Credit Cycle

The report identifies private credit as a key area to watch. While most rated U.S. BDCs carry investment-grade ratings, their underlying borrowers with available ratings are predominantly non-investment grade, with a concentration in the single-B category. The report also highlights increased use of payment-in-kind (PIK) arrangements, reflecting pressure on borrowers facing higher financing costs and AI-driven disruption.

Meanwhile, AI investment is creating an increasingly uneven credit landscape. Companies supporting the build-out of AI infrastructure are seeing improving credit conditions, while businesses exposed to disruption face growing pressure. Hyperscalers present a different challenge: the enormous capital required to expand data centers and computing capacity could increase leverage and leave lenders exposed if demand or investment returns fall short of expectations.

Together, these developments underscore the importance of looking beyond aggregate credit trends to assess how financing structures, technological disruption and policy changes may influence the next credit cycle.

The full U.S. Credit Spotlight 2026 is available here.

About Credit Benchmark

Founded in 2015, Credit Benchmark is a leading provider of credit risk data and analytics. The company aggregates and anonymises contributed risk views from more than 40 global financial institutions, producing independent, obligor-level credit consensus ratings and related credit metrics. Covering more than 125,000 legal entities, most of which are not publicly rated, Credit Benchmark helps financial institutions enhance credit assessment, benchmark internal risk views, and identify emerging risks. Credit Benchmark is headquartered in London, with offices in New York and Bangalore.

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