The tension in the private credit market is shifting from &#34;worry&#34; to &#34;pricing.&#34; As investor concerns about AI-related risks, liquidity, and lending standards intensify, a fund under New Mountain in the United States has chosen to sell nearly $500 million in assets at a discount, reflecting increasing pressure in the industry.
According to Bloomberg, New Mountain announced on Tuesday that one of its private credit funds sold $477 million in assets at a price of &#34;only $0.94 for every $1 of assets,&#34; aiming to enhance portfolio diversification and reduce PIK income (Payment-in-Kind) to improve financial flexibility.
This disposal comes at a time when discussions about private credit risks have significantly escalated. A week ago, Blue Owl closed the redemption window for one of its funds and began selling some direct lending investments to return funds to investors, resulting in a $2.4 billion decrease in its market value and dragging down the stock prices of private credit-related companies such as Ares Management and Blackstone.
Market alarms are sounding. Boaz Weinstein, founder of Saba Capital, stated that private credit is in the early stages of a collapse, with industry concerns focused on excessive spending on AI, exposure to software investments threatened by AI, and lending standards.
UBS reports that the default rate in private credit could soar as high as 15%, and the misalignment risks between funding and assets are being reassessed.
<h2>New Mountain Discount Transaction: Reducing PIK, Adjusting Portfolio Structure</h2>
New Mountain defines this sale as an active portfolio rebalancing. The company stated that the purpose of the transaction includes increasing portfolio diversification, reducing PIK income, and enhancing financial flexibility. Company executives had informed investors at the end of last year about plans to sell up to approximately $500 million in assets, and this transaction's scale is close to that target.
From an industry perspective, the transaction price of &#34;0.94 dollars to 1 dollar&#34; itself is a signal: in a phase where valuations and liquidity are more sensitive, discounted transactions are more easily interpreted by the market as a &#34;de-leveraging adjustment&#34; under declining risk appetite.
New Mountain also disclosed that commercial services account for 22.4% of its overall investment portfolio, while software accounts for 22.2%, the latter being at the center of market discussions regarding the impact of AI on software business models.
<h2>Asset-side Returns Under Pressure: NAV Decline, Dividend Cut</h2>
New Mountain's own financial metrics also reflect that pressure is being transmitted. The company stated that its BDC saw its net asset value per share decline from $12.06 in the previous quarter to $11.52.
At the same time, the company has cut its dividend from $0.32 per share to $0.25, due to income pressure from interest rate cuts and narrowing credit spreads.
The company indicated that it has repurchased $30 million in stock since the end of the third quarter of 2025 and expects to continue repurchasing this year. CEO John Kline stated that this move &#34;highlights confidence in NMFC's long-term value.&#34;
<h2>Blue Owl Liquidity Crisis Spillover: Valuation and Structure Repricing</h2>
The larger impact comes from industry-wide liquidity pressures. According to Bloomberg, after restricting redemptions, Blue Owl began selling some direct lending investments to return funds to investors, leading to a $2.4 billion decline in its market value and causing the stock prices of several private credit-related companies to fall in tandem.
This chain reaction has reinforced investors' re-examination of semi-liquid product mechanisms: When redemption demands rise and the underlying assets are not trading smoothly, fund structures, asset valuations, and exit paths may all come under pressure, leading to an increase in risk premiums.
<h2>AI Concerns Combined with Default Expectations: Discount Liquidation and &#34;Bottom Fishing&#34; Coexist</h2>
Discussions around AI are becoming part of the private credit risk narrative. Boaz Weinstein attributes the industry's fractures to excessive spending on AI, software exposure threatened by AI, and lending standard issues, pointing out a market dislocation: some credit asset prices are at historical highs, but related stocks and fund structures are experiencing &#34;significant discounts.&#34;
His firm Saba Capital and Cox Capital have announced cash acquisition offers for equity in three funds managed by Blue Owl at prices discounted by 20% to 35% from the net asset values disclosed by the funds, to provide liquidity solutions for retail investors looking to exit but facing difficulties with redemptions.
The related offers involve Blue Owl Capital Corporation II and are planned to extend to Blue Owl Technology Income and Blue Owl Credit Income. Bloomberg reports that Blue Owl's stock price has fallen about 50% over the past year, despite the company's revenue still rising during the same period.
On the risk side, UBS Group AG's judgment that &#34;default rates could reach as high as 15%&#34; has heightened market expectations for future losses; on the funding side, Weinstein and others are attempting to view the discounts as an opportunity window. For investors, the key variables are shifting from &#34;yield levels&#34; to &#34;structural liquidity, valuation credibility, and the speed of repricing related to AI exposures.&#34;

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Following Blue Owl's redemption restrictions that triggered a decline in the stock prices of several listed private equity firms, New Mountain's funds are selling nearly $500 million in assets at a discount, further intensifying market concerns. Industry worries are focused on excessive spending on AI, exposure to software investments threatened by AI, and lending standards. UBS warned that the default rate in private credit could soar to 15%

- The private credit market is shifting from "concerns" to "pricing," with investors focusing on AI-related risks and liquidity.  
- New Mountain sold $477 million in assets at a discount, aiming to enhance portfolio diversification and reduce PIK income, amidst rising industry pressures.  
- The industry's challenges are highlighted by Blue Owl's restricted redemptions, causing significant market repercussions and prompting investors to reevaluate liquidity mechanisms and exposure to AI risks.

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Nearly $500 million in assets sold at a 6% discount! AI scares American private credit funds