The US private credit market strikes again with a shocking turn! BlackRock (BLK.US) has another loan valuation that has dropped to zero

Wall Street Financial APP has learned that BlackRock (BLK.US) has directly written down the valuation of a private loan from 100% of face value to zero, just three months after it was still valued at face value. This marks the second recent case of a sudden “write-off” in its private credit division.

According to the fourth-quarter report released last week by BlackRock’s TCP Capital Corp., a loan of approximately $25 million to Infinite Commerce Holdings is now worthless—Infinite Commerce is a so-called “Amazon aggregator” that acquires online sellers selling a variety of products from spa items to light bulbs. Last year in Q3, the company still valued this subordinate debt at 100% of face value.

This write-down occurred just a few months after Infinite Commerce merged with another Amazon aggregator and BlackRock debtor, Razor Group, in August last year. The merger created a new debt structure, with valuations still near face value at the time. Previously, BlackRock’s valuation of the loan to Razor had been in serious distress.

Like other private credit lenders, BlackRock is facing a sharp reversal in the Amazon aggregator industry. The sector boomed during the COVID-19 pandemic with a surge in online shopping but has recently attracted attention due to frequent debt restructurings. Another lender to Infinite Commerce, Victory Park Capital, also fully wrote off its investment in the December 31st filings, citing weak demand and increased inventory costs due to tariffs.

Although this is a relatively small loan in a niche segment with issues, the sudden valuation cut highlights a key problem pointed out by critics—the illiquidity of private loans often causes valuations to lag behind the deteriorating business conditions. For example, Zips Car Wash, a chain car wash company, had its private debt valued close to face value just months before filing for bankruptcy protection.

Notably, BlackRock had already written down its private debt to home improvement company Renovo Home Partners to zero in November last year. Renovo, formed in 2022 by private equity firm Audax Group through the consolidation of several regional kitchen and bathroom renovation companies, suddenly filed for bankruptcy in early November and announced plans to shut down operations. This bankruptcy led to a sharp decline in BlackRock’s valuation of Renovo’s private debt. TCP Capital Corp. CEO Philip Tseng emphasized at the time that the outcome for Renovo was “attributed to issues within the issuer itself, not a reflection of a broader industry decline.”

According to the fourth-quarter report, BlackRock’s TCP Capital Corp. also partially wrote down its position in SellerX. The report states that 91% of the valuation decline in its portfolio stems from deals underwritten in 2021 or earlier, which are facing challenges due to “persistently high interest rates.”

These moves have heightened market concerns over defaults and underwriting standards in the $1.8 trillion private credit market. The sector’s heavy bets on software companies threatened by AI have led anxious investors to make unprecedented redemption requests.

It is reported that Blackstone Group (BX.US), the global private equity giant, experienced the most severe capital outflows since its inception in the first quarter of 2026. According to the latest disclosures, the flagship private credit fund, BCRED, saw net outflows of $1.7 billion last quarter, breaking previous records and triggering market panic.

This turmoil is not an isolated event but a chain reaction of contagion in credit risk across the industry. Earlier, another leading private credit firm, Blue Owl Capital (OWL.US), announced that some of its funds had suspended redemptions, quickly shattering the illusion of “high yield, low volatility” in these assets.

Over the past decade, the global private credit industry has expanded rapidly to $2 trillion but is now facing multiple challenges: inflated valuations and lack of transparency raising doubts; unconventional practices like “promise to pay” by Blue Owl to replace client redemptions worsening trust; and last year’s wave of bankruptcies among US auto parts suppliers and subprime auto lenders exposing significant risk exposures.

These shocks are still ongoing. Last Friday, the sudden collapse of UK mortgage lender Market Financial Solutions Ltd. again shook the market. Wall Street lenders generally worry that this may be just the tip of the iceberg— as industry slang “cockroach theory” suggests, when one institution fails, more hidden risks are likely lurking.

Nevertheless, top private credit lenders continue to report strong relative returns. A point highlighting ongoing market debate is that Apollo Global Management CEO Mark Rowan warned that the private credit industry will undergo a shakeout. On the same day, Ares Management CEO Michael Arougheti stated that the recent UBS analyst forecast of a 15% default rate in private credit last week was “completely wrong.”