Investors Warn of Refinancing Risks for Legacy Private Credit
Investors at the Milken Asia Summit warn that private credit loans from 2021 and 2022 face higher default risks due to rising interest rates.
Steve Kuppenheimer, partner and head of private investments at Lord, Abbett & Co., warned that legacy private credit loans are facing increased refinancing risks. Speaking at the Milken Asia Summit 2026, Kuppenheimer noted that loans originated in 2021 and 2022 are particularly vulnerable because they were underwritten when base interest rates were near zero.
As these older facilities approach their maturity dates, they may experience greater financial stress. Kuppenheimer stated that the shift in the interest rate environment creates a higher risk of default for borrowers who must now refinance debt at significantly higher current rates.
