KBRA Releases Research – Private Credit: NAV Loans Evolve as Product Goes Mainstream

KBRA Releases Research – Private Credit: NAV Loans Evolve as Product Goes Mainstream

KBRA releases research examining trends across the net asset value (NAV) landscape. Record KBRA-rated NAV issuance in 2025, followed by continued deal activity in 2026, underscores the evolution of NAV lending from a niche liquidity tool into an established component of fund finance. Broader sponsor and lender adoption has supported standardization, expanded market participation, and encouraged new structures that continue to adapt to shifting general partner needs while preserving credit discipline.

KBRA NAV loan ratings have remained broadly stable since our prior NAV report (see Private Credit: NAVigating the PE Landscape—NAV Loans Still Perform), despite extended hold periods and weaker asset mixes in certain older-vintage private equity (PE) funds. Of the 279 KBRA surveillance reviews of PE and secondary NAV loans from 2020 through 1H 2026, 95% of rating actions were affirmations and 4% were upgrades. This credit stability reflects structural protections, such as cash sweep mechanisms, other lender controls, and sponsors’ disciplined approach to portfolio and liquidity management.

This KBRA report updates our view of NAV loan issuance, structural trends, and rating performance with a focus on PE and secondary fund transactions, issuance drivers, market evolution, and the rating and structural factors shaping credit rating outcomes. For the purposes of this report, KBRA excludes NAV facilities backed by credit funds. Although these facilities are conceptually similar to PE and secondary NAV loans, they differ in terms of collateral composition, repayment behavior, and issuance drivers (see Private Credit: A Breakout Year for Rated Note Feeders and CFOs for more detail on credit funds).