<div id="readability-page-1">Loan values fall: Fourteen major BDCs marked down portfolios in Q1, with $1.2 billion below amortized cost and distress concentrated in smaller funds. Scrutiny intensifies: Federal prosecutors are probing BlackRock’s valuation methods, while regulators push for more transparency and stress testing in the sector. Capital deployment slows: HSBC paused deploying $4 billion in private credit funds after heavy losses, and Goldman Sachs seeks to shift risk off its balance sheet.</div>

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<p>Private credit is facing challenges as fourteen major BDCs reported markdowns of $1.2 billion below amortized cost in Q1, particularly affecting smaller funds. Federal prosecutors are investigating BlackRock's valuation methods, while regulators demand increased transparency and stress testing. Additionally, HSBC has halted the deployment of $4 billion in private credit funds following significant losses, and Goldman Sachs is looking to offload risk from its balance sheet.</p>

- Fourteen major business development companies (BDCs) marked down their portfolios in Q1, totaling $1.2 billion below amortized cost, with distress concentrated in smaller funds.  
- Federal prosecutors are investigating BlackRock’s valuation methods as regulators demand increased transparency and stress testing in the sector.  
- Capital deployment has slowed, illustrated by HSBC's pause on $4 billion in private credit funds and Goldman Sachs' efforts to transfer risk off its balance sheet.

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Private credit faces markdowns, probes, and funding slowdown