Pimco Sees Crisis of ‘Bad Underwriting’ in Private Credit

The rising strain in the private credit market is a result of years of sloppy underwriting standards in lending, according to Pacific Investment Management Co.

“There is a reckoning going on right now,” Christian Stracke, president at the $2.3 trillion asset manager, said in a March 10 podcast alongside Gregory Hall, the firm’s head of US global wealth management. “It’s not just a crisis of confidence, it’s a crisis of really bad underwriting.”