Three data points from this week worth marking down.
First, two large direct lenders re-cut term sheets on upper-middle-market unitranche deals at SOFR + 475 — inside of 500 for the first time since Q2 2023. Second, a sponsor we track pulled a syndicated loan and re-ran it through private credit at tighter pricing and better covenants. Third, a BDC we follow guided to flat NIM next quarter despite a 25bp cut — which only makes sense if origination spreads are compressing faster than funding costs.
The read: capital formation in private credit has finally caught up with deal flow. The 2022–2023 vintage premium is gone. New money will work harder for less. Underwriting discipline now matters more than origination volume — which is exactly the environment in which the better credit shops outperform.
We are not trimming. We are watching for the marginal lender who keeps pricing tight even as defaults normalize. That is who gets hurt in 2026.
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Notes are informal observations from the Beckett team and do not constitute investment advice or an offer of any security.