私人信贷市场：理解其第一次真正的考验

Gabriel Yomi Dabiri and Cynthia Weiss Global Private Credit & Direct Lending The collapse of First Brands Group, the parallel collapse of Market Financial Solutions in the UKand recent redemption calls at some of the largest players in the private credit market haveplaced the US$1.8 trillion private credit industry under wide public scrutiny for perhaps the firsttime in the asset class’s phenomenal rise since the global financial crisis of 2008 (GFC). As of mid-March 2026, several large private credit funds faced unprecedented redemptionpressure, and JPMorgan has reportedly marked down collateral on software loans in privatecredit financing facilities, tightening the availability of funding to private credit lenders. However, instead of portending doom for the asset class, these events should instead be seenas a market correction that can fortify the foundations of private credit, thereby allowing not justfor continued growth, but for healthier and more sustainable growth. This Q&A alert examines the structural fault lines and legal risks that underlay the disruptionsdescribed above, and explores specific steps that private credit funds, private equity sponsorsand banks should be taking now to navigate this market correction. I.The Collapse of First Brands Group and Tricolor Holdings (US) and Market Financial Solutions (UK) –Background and Legal Implications What happened with First Brands Group,Tricolor Holdings and Market Financial Solutions andwhy does it matter for private credit lenders? First Brands Group (First Brands), one of the largest auto parts manufacturers in its sector, filed for Chapter 11 inSeptember 2025,¹ followed shortly thereafter by the Chapter 7 liquidation filing by subprime auto lender TricolorHoldings. In January 2026, First Brands’s founders Patrick and Edward James were criminally indicted² in theSouthern District of New York on allegations of a US$3 billion-plus lender fraud that included fabricated invoices,double- and triple-pledged collateral, and collateral that never existed. A Houston bankruptcy court approved GM/Fordbridge financing for the debtors,³ and asset sales proceeded through February 2026. The combined collapses cast a spotlight on concentration risk across private credit books exposed to auto-adjacent, late-cycle, covenant-lite borrowers, and naturally also raised concerning questions about underwriting discipline and portfoliomonitoring standards, not only for these facilities but also across the entirety of private credit as an asset class. In the UK, a similar collapse befell Market Financial Solutions (MFS). The company’s creditors are currently allegingthat approximately⁴ £1.2 billion in loans was backed by only £230 million of genuine collateral, with double-pledgingallegations mirroring the accusations levied against First Brands. The enforcement environment resulting from the above incidents will raise the bar for lender diligence standards, byinvestors, and potentially by regulators, both at the point of loan origination and for on-going covenant compliance,with private credit facing renewed scrutiny on both sides of the Atlantic. 1The cross-border dimension deserves explicit attention. Funds with UK or European portfolio companies, limitedpartner (LP) capital from Alternative Investment Fund Managers Directive (AIFMD)-regulated vehicles, or cross-border credit facilities, must navigate a materially different regulatory environment from their US counterparts. Inthe UK, the Financial Conduct Authority (FCA) has signaled heightened focus on private market liquidity practices inthe wake of the MFS collapse. In the EU, European Long-Term Investment Fund (ELTIF) 2.0 introduces retail accessprovisions for private credit vehicles that carry their own liquidity management and disclosure requirements, whichdiffer in important respects from the Security and Exchange Commission’s (SEC) framework for US retail-marketedfunds. For structures that span jurisdictions, the gap between US and UK/EU standards on collateral documentation,enforcement rights and investor disclosure is a live source of transaction risk that requires coordinated,multijurisdictional legal advice. II.The Redemption Wave – From Blue Owl to an Industry-wide Test What happened at Blue Owl? To begin, it helps to understand the evolution of the business development company (BDC). A BDC is a typeof closed-end investment company created under the Investment Company Act of 1940. BDCs serve as capitalformation vehicles that channel investor capital into private credit markets, particularly loans to middle-marketcompanies that are often underserved by traditional banks. The first phase of the private credit industry’s growth was dominated by so-called BDC 1.0. These BDCs draw capitalfrom institutional investors and trade on public stock exchanges. Investors achieve some degree of liquidity underthe BDC 1.0 structure primarily by trading on the secondary market through exchanges, rather tha