Credit Markets Didn’t Slow Down. We Just Owed You an Update.

📣 Career.Credit — We’re Back. Here’s What You Missed in Credit.

It’s been a little while since our last update. Busy markets, busy hiring cycles, and a mountain of dealflow to track.
But we’re back with a fresh edition of This Week in Credit, and the past few days have delivered plenty to talk about.

Let’s get straight into it.

📌 1. BlackRock’s private-credit CLO fails tests as problem loans rise

One of BlackRock’s private-credit CLOs tripped key performance tests after an uptick in bad loans.
Why it matters: CLOs only fail tests when real stress hits the underlying portfolio, a sign that pockets of private credit are feeling pressure.
The vibe: “It’s fine… but let’s keep an eye on it.”

📌 2. BDCs head into 2026 with growing credit-quality concerns

Fitch is warning that BDC portfolios are softening: more downgrades, rising non-accruals, and weaker coverage.
Why it matters: BDCs are early warning indicators for middle-market credit health.
The vibe: Still calm, but turbulence lights are flickering.

📌 3. Blue Owl cancels merger of two private-credit funds

A sharp selloff has pushed Blue Owl to shelve its planned fund merger.
Why it matters: Consolidation is hard to execute during volatility. Investors want liquidity clarity before they sign up for structural changes.
The vibe: “Not right now.”

📌 4. JPMorgan says private credit is now ‘core’, not alternative

JPMorgan is formally rethinking the 60/40 model and elevating private credit to a mainstream allocation.
Why it matters: This is the biggest affirmation yet of private credit’s institutional importance.
The vibe: “Welcome to the big leagues.”

📌 5. UBS O’Connor loses its private-credit chiefs before a major deal

UBS O’Connor’s private-credit leadership team exited just as the firm prepares for a notable partnership transaction with Cantor.
Why it matters: Leadership changes right before strategic deals usually point to internal disagreements on direction, risk, or structure.
The vibe: “Great timing, everyone.”

📌 6. Deutsche Bank joins Barclays & Apollo in transition-finance push

Deutsche is now targeting the same sustainability-transition lending space as Barclays and Apollo.
Why it matters: Transition finance is shaping up to be one of the most competitive segments in private credit. Especially for bespoke, structured deals.
The vibe: Every bank wants its own “energy transition” franchise.

📌 7. Jefferies keeps going: up to $1.2B in power-sector debt to refinance private credit

Jefferies is syndicating a $1.2B package to take out existing private-credit loans tied to power and industrial equipment borrowers.
Why it matters: Banks are fighting their way back into deals that private credit dominated for years.
The vibe: “We’ll take this one from here.”

📈 What It Means for the Market

• Stress indicators are rising (CLO test failures, BDC downgrades, fund-merger reversals).

• But institutional appetite is growing, private credit is officially part of the core portfolio mix.

• Banks are aggressively reclaiming territory in infrastructure, power, and transition finance.

• Expect talent wars across infra credit, sponsor finance, energy transition, and risk/oversight functions.

🗓 What’s Next

We’re getting back into a consistent publishing rhythm — and the next edition includes a new downloadable for the Career.Credit community.

Thanks for sticking with us.
James — Career.Credit