COLUMBUS, Wis., Feb. 27, 2026 (GLOBE NEWSWIRE) — Recent developments in private credit markets are raising serious concerns that conditions may be echoing the early stages of the 2008 financial crisis.
The sale of $477 million in private credit loans by New Mountain Finance at 94 cents on the dollar, following confirmed forced sales by Blue Owl, signals mounting stress. Firms are increasingly liquidating assets to support stock prices and reduce exposure to payment-in-kind (PIK) loans, where interest accrues rather than being paid in cash.
“This is classic late-cycle behavior,” said Eisenga. “When funds begin selling assets at discounts to manage outflows and prop up valuations, it tells you liquidity is tightening beneath the surface.”
Strategists at UBS now project private credit defaults could rise to as high as 15% in adverse scenarios, particularly in software and technology sectors heavily exposed to leveraged borrowing.
“A 15% default projection is not a minor adjustment, it’s a warning,” Eisenga stated. “Private credit was built during an era of cheap money. That era is ending, and leverage is being exposed.”
If private loans migrate into Collateralized Loan Obligations (CLOs), leverage could effectively multiply, potentially masking risk much like structured products did prior to 2008. Rising defaults in such structures could amplify losses across markets.
Meanwhile, major banks maintain exposure through Business Development Companies (BDCs), leveraged loans, and high-yield bonds, despite public assurances of limited risk. As Jamie Dimon has cautioned, vulnerabilities can sit quietly on balance sheets before surfacing abruptly.
Market signals are also diverging. Credit markets have failed to confirm the recent equity rally, and the NASDAQ Composite is testing long-term support levels. Treasury and SOFR futures markets increasingly price in rate cuts, contradicting narratives of accelerating growth.
“When bond markets and equity markets tell different stories, credit usually gets it right,” Eisenga added. “We are seeing tightening liquidity, declining buybacks, and rising default risk. That combination deserves attention.”
Comparisons to 2007–2008 by respected commentators such as Mohamed El-Erian and Jeffrey Gundlach reflect not predictions of identical outcomes, but recognition of familiar patterns: excess leverage, complacency, and eventual forced deleveraging.
“History doesn’t repeat exactly,” Eisenga concluded, “but it does repeat behavior. Prudent risk management today is not pessimism—it’s responsibility.”
About First American Properties
First American Properties is a privately held investment and real estate management firm headquartered in Columbus, Wisconsin. The firm specializes in strategic asset acquisition, development, and portfolio management across diverse sectors of the U.S. economy.
Disclaimer: This press release is for informational purposes only and does not constitute investment advice. Forward-looking statements are subject to risks and uncertainties.
Media Contact:
First American Properties
Michael Eisenga, CEO
meisenga@firstamericanusa.com
(920) 350-5754
