Private credit market panic spreads to Wall Street, with several funds restricting redemptions

Gate News Report, March 16 — Tensions in the private credit market have spread to Wall Street, with several major U.S. banks tightening loans to the industry and some funds restricting investor redemptions. JPMorgan has downgraded the value of some loans to private credit funds, reducing its lending. Morgan Stanley limited redemptions for one private credit fund after investors sought to redeem nearly 11% of shares. BlackRock’s flagship fund HLEND restricted further withdrawals after a surge in first-quarter redemption requests reaching $1.2 billion, hitting the 5% limit. Blackstone’s flagship fund BCRED saw a first-quarter redemption surge, withdrawing $3.7 billion, marking its first quarterly outflow. Blue Owl Capital sold $1.4 billion in assets and permanently halted redemptions for one fund. Cliffwater’s flagship fund set a redemption cap at 7% after a 14% redemption request. Market sentiment has been impacted by valuation concerns, transparency issues, and cases like the bankruptcy of auto supplier First Brands, putting pressure on funds with significant exposure to the software industry. Moody’s data shows that as of June 2025, U.S. banks had nearly $300 billion in outstanding loans to private credit institutions.