BlackRock wrote down the value of a private loan to zero by the end of 2025, having valued it at 100 cents just three months earlier. This marks the second sudden and significant loss for its private credit division in recent times.
BlackRock TCP Capital’s fourth-quarter earnings report released last week revealed that a roughly $25 million loan it provided to Infinite Commerce Holdings has turned into a loss. Infinite Commerce Holdings is a so-called “Amazon aggregator” that acquires online sellers of various goods, from spa treatments to light bulbs. This loan loss is part of the broader loan losses that BlackRock warned about at the end of January. At that time, BlackRock disclosed that the private credit fund was preparing to reduce its net asset value by 19%.
Although the loan amount was not large and the industry involved was in trouble, its sudden impairment highlighted a key flaw in the private credit sector that critics have pointed out: there is a lag between the valuation of illiquid loans and the deterioration of the performance of the companies behind them. In the months before filing for bankruptcy protection, the valuation of Zips Car Wash was almost on par with its face value, mainly due to the generous support of its private credit backers. In November last year, BlackRock TCP significantly reduced the value of all the loans it had issued to the struggling home improvement company Renovo Home Partners.
Just a few months ago, Infinite Commerce merged with another aggregator and BlackRock debtor, Razor Group, in August, forming a new debt structure whose value was on par with its face value. Previously, BlackRock’s loan valuation to Razor had been severely impaired.
Like other private credit institutions, BlackRock is also facing a sharp reversal of the Amazon aggregation platforms. These platforms flourished during the pandemic as online shopping soared. The near-total write-down of the restructured Infinite Commerce debt highlights the scale and speed of the financial reshuffle currently sweeping the entire industry.
According to the submitted documents, another lender of Infinite Commerce, Victory Park, has written off all its loans as of December 31 and attributed its poor performance to sluggish demand and rising inventory costs due to tariffs. A representative of Victory Park did not respond to requests for comment.
According to the fourth-quarter financial report, BlackRock TCP also partially wrote down its holdings in SellerX. The fund cut its dividend from 25 cents per share to 17 cents last week, causing the share price to plummet.
BlackRock TCP stated in the submitted documents that 91% of the valuation write-downs in its portfolio originated from transactions it underwrote in 2021 or earlier, which were challenged by “continuously rising interest rates”.
These measures have intensified concerns over defaults and underwriting standards in the $1.8 trillion private credit market. The industry’s heavy bets on software companies threatened by artificial intelligence have led anxious investors to make unprecedented redemption requests. Blackstone Group announced on Monday that it would allow investors to redeem a record 7.9% of its flagship private credit fund.
Despite this, top private credit institutions still maintain strong relative returns.
To highlight the debate over the future direction of the market, Mark Rowan, CEO of Apollo Global Management, warned that private credit companies are about to face a shakeout. On the same day, Mike Arougheti, CEO of Ares Management, said that the prediction by UBS analysts last week that the default rate of private credit could reach 15% was “completely wrong”.
