BlackRock's $25 million loan drops from "par value" to zero in three months, renewing concerns over private credit risk

Media reports indicate that BlackRock has written down a private loan to zero at the end of 2025, whereas just three months earlier, the loan was still valued at 100% of face value. This is also the second recent sudden “write-off” event impacting its private credit business.

In its fourth-quarter filing released last week, BlackRock TCP Capital Corp. stated that the approximately $25 million loan was provided to Infinite Commerce Holdings. This company is a so-called “Amazon aggregator,” which sells various products by acquiring online sellers. Now, the loan is worthless.

This write-down is part of a broader loan loss disclosure made by BlackRock at the end of January this year, when the company announced that its private credit fund was preparing to mark down its net asset value by 19%.

Private Credit Valuation Lag Issues Exposed

Analysts believe that although this is a relatively small loan and the sector itself is facing difficulties, the sudden valuation reduction highlights a key issue pointed out by critics: Loans with poor liquidity often have valuations that lag behind the deteriorating operational conditions of the borrowing companies.

For example, Zips Car Wash’s private credit supporters still valued its loan close to face value a few months before filing for bankruptcy protection. In November last year, BlackRock TCP also significantly reduced the value of its loan to home improvement company Renovo Home Partners to near zero; this company is also in distress.

The write-off occurred a few months after Infinite Commerce merged with Razor Group, another Amazon aggregator and BlackRock’s debtor, in August. At that time, the new debt structure was still valued at face value. Previously, BlackRock had valued its loan to Razor at a severely distressed level.

Like other private credit firms, BlackRock is facing a sharp reversal in the Amazon aggregator industry. The sector grew rapidly during the COVID-19 pandemic with the surge in online shopping. Now, the restructured Infinite Commerce debt has been written down from “face value” directly to zero, demonstrating the scale and speed of the financial turmoil this industry is experiencing.

Another lender to Infinite Commerce, Victory Park, has fully written off its investment as of December 31, according to the documents. The firm attributed poor performance to weak demand and increased inventory costs due to tariffs. A Victory Park representative did not respond to requests for comment.

BlackRock TCP also indicated in its Q4 filing that it had partially written down its investment in SellerX. Last week, the fund reduced its dividend from $0.25 per share to $0.17, causing a significant drop in the stock price.

Growing Concerns About the Private Credit Market

BlackRock TCP stated that 91% of the valuation reductions in its portfolio stem from deals underwritten in 2021 or earlier, which are now impacted by the “long-term high interest rate environment.”

These developments further intensify market concerns over default risks and underwriting standards in the $1.8 trillion private credit market. The sector had previously made huge bets on software companies, which now face threats from artificial intelligence, leading to unprecedented redemption requests from investors. Blackstone announced on Monday that it would allow investors to redeem a record 7.9% of their shares from its flagship private credit fund.

However, leading private credit firms continue to deliver relatively strong returns.

Highlighting differing market outlooks, Apollo Global Management CEO Marc Rowan warned that the private credit industry is about to undergo a reshuffle. On the same day, Ares Management CEO Mike Arougheti stated that the recent prediction by UBS analysts that private credit default rates could rise to 15% is “completely wrong.”

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