The U.S. Direct Lending’s Maturity Wall: Why Credit Quality Matters as Much as Debt Coming Due

For example, among borrowers with debt maturing in 2027, the proportion associated with first lien or unitranche loans valued below 90% of par more than doubled, increasing from 15.3% to 30.7% over the same period.

This divergence highlights an important distinction: While many borrowers are addressing upcoming maturities, others may face more complicated refinancing decisions.

Lincoln’s data suggests that borrowers and lenders are actively addressing upcoming maturities through refinancings, extensions, repayments and other capital structure solutions. However, the composition of the remaining debt is changing.

One possible explanation is that borrowers with stronger credit profiles have been more successful in refinancing or extending their obligations, while those experiencing greater financial challenges have fewer alternatives.

Importantly, this does not mean the broader direct lending market is experiencing widespread deterioration. Rather, the data suggests that refinancing risk remains concentrated among a relatively small subset of borrowers. Of the $652.9 billion of borrower debt maturing between 2027 and 2030, approximately $87.2 billion, or 13.4%, is associated with loans valued below 90% of par. Of this amount, just $22.9 billion is scheduled to mature in 2027, representing only 3.5% of the total $652.9 billion maturity profile. Furthermore, maturities in 2028 and beyond provide additional time for borrowers to refinance or extend their obligations ahead of their scheduled maturity dates, suggesting that the current concept of an impending maturity wall may be a false concept.

Lincoln’s analysis indicates that approximately $40 billion of borrower debt maturing through 2027 originated in the 2020 and 2021 vintages, representing approximately 56% of the debt across the vintages examined.

These loans were originated during a period of relatively high purchase price multiples, low borrowing costs and elevated transaction activity. Since then, borrowers have navigated higher interest expenses, inflationary pressures and changing industry fundamentals.

For companies that have delivered earnings growth, refinancing may be relatively straightforward. For others, the combination of leverage, higher financing costs and operating performance may require more tailored solutions.

Industry dynamics add another layer of complexity. Lincoln’s data reveals elevated concentrations of debt valued at less than 90% of par in selected technology, healthcare and consumer subsectors. These differences reinforce the importance of evaluating borrower-specific fundamentals rather than relying solely on aggregate market conditions.

While most borrowers will seek to address maturities through traditional refinancing or extensions, others may require additional equity capital, balance sheet restructurings or changes in ownership. In these situations, lenders often encourage borrowers to engage financial advisors and explore strategic alternatives, including asset sales, restructurings or other liquidity solutions, before ultimately pursuing foreclosure or taking control.

However, in some cases, private equity firms are deciding to turn over businesses to lenders rather than injecting incremental equity. Lincoln’s proprietary data indicates that debt associated with companies where lenders have taken, or were imminently expected to take, control increased from $10.7 billion in 2024 to $24.2 billion in 2025. Through September 2026, Lincoln identified at least $29.0 billion associated with completed and in-process lender control situations.

Interestingly, approximately 61.7% of companies experiencing lender control transactions in 2026 received sponsor equity infusions during 2025 or 2026.

This highlights both the willingness of sponsors to support existing investments and the reality that additional capital does not always resolve underlying operating or capital structure challenges.

While lender control remains one potential outcome for a subset of challenged borrowers rather than a reflection of the broader market, this lender-takeover data likely understates the extent of financial pressure across the market, as many borrowers pursue strategic alternatives without ultimately transitioning to lender ownership. Nevertheless, the increasing activity underscores the importance of evaluating refinancing alternatives early and understanding the sustainability of a company’s capital structure.