Moody’s warns US private debt borrowers masking credit stress with delays

Moody’s has issued a warning about US private debt borrowers who are delaying interest payments and extending maturities, actions that obscure underlying credit stress. The credit rating agency’s assessment indicates that these financial maneuvers are being used to defer defaults, rather than resolve them. Among 607 borrowers monitored, the default rate rose from 4% to 5.8% when considering distressed amendments and maturity extensions. This suggests that headline default rates may understate the true extent of financial distress among these borrowers. The revelation from Moody’s could have broader implications for companies like NuScale Power, which are navigating a challenging financial landscape.

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