In late 2024, a projected $957 billion of debt maturities were anticipated in 2025.1 However, updated data through Q3 2025 indicates that only $786 billion in loan maturities are set to occur this year.2 A record increase in modifications has extended maturities on outstanding loan obligations.
Source: St. Louis Fed
In today’s elevated-rate environment, borrowers continue to seek loan modifications and lenders generally remain willing to work with them, often granting short-term extensions of up to 24 months in the hope that conditions will improve.2 However, repeated modifications are not a sustainable long-term fix for the problems at hand, as factors such as regulatory scrutiny, Current Expected Credit Loss (CECL) accounting requirements, liquidity constraints, and deteriorating debt-service coverage ultimately force lenders to classify loans as impaired and materially increase loss reserves.
S&P Global’s latest report projects $936 billion in maturities for 2026.3 We believe that as lenders grow impatient of extending and modifying struggling loans, there will be continued strong demand for refinancings in 2026. Refinancings have been the most popular use of new loan originations, with over 70% of 2025 originations falling into this category.4
Prospect Credit REIT, LLC (“PCRED”), a non-traded credit REIT managed by an affiliate of Prospect Capital Management, L.P. (“Prospect”) launched in 2024, is unencumbered by troubled assets or legacy liabilities. We believe PCRED is well-positioned to capitalize on refinancing opportunities in a market facing a higher maturity wall in 2026.
1 MBA, Newmark Research as of 2/10/2025
2 Trepp Research, 2023
3 S&P Global Market Intelligence as of 9/23/2025
4 Newmark Capital Markets Report Q3 2025
Disclosures:
This material is educational in nature and does not constitute an offer to sell or the solicitation of an offer to buy any securities. All statements, assumptions and opinions included in this material are based upon current market conditions as of the date of the material and are subject to change. This material does not purport to be all-inclusive or otherwise contain all of the information that a prospective investor may need or desire concerning an investment. Prospective investors should read the Confidential Private Placement Memorandum of PCRED in its entirety before making a decision to invest. Investment in PCRED is for Accredited Investors only. There is no guarantee that PCRED’s objectives will be met or that PCRED will qualify as a REIT. NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF ANY OFFERING AND ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Neither PCRED nor Prospect is adopting, making a recommendation for or endorsing any investment strategy or particular security. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. All investing is subject to risk, including the possible loss of principal. Prospect cannot guarantee that the information herein is accurate, complete or timely. We make no representation or warranty in respect of any information derived from the third-party sources which have not been independently verified.
Forward-Looking Statements: Certain statements made in this material that relate to future plans, events or performances are forward-looking statements within the meaning of the federal securities laws. Forward-looking statements predict or describe future operations, financial outlooks, business plans, business and investment strategies, portfolio management, and the performance of investments. Such statements are based on current expectations, estimates, forecasts and projections and are not guarantees of future performance. Such information is based upon certain assumptions about future events or conditions and is intended only to illustrate hypothetical results under those assumptions. All statements and assumptions included in this material are based upon current market conditions as of the date of the material and are subject to change.
Investing in the Fund during a private placement is speculative and involves a high degree of risk, including the risk that you may receive little or no return on your investment or that you may lose part or all of your investment. A private placement has a relative lack of liquidity and is suitable only for persons of substantial financial means who have no need for liquidity. There can be no assurance that PCRED’s investment objectives will be met. An investor should carefully consider the fees and expenses, and other information found in the PPM, including the “Risk Factors” section, before making an investment decision.
Ultimus Fund Distributors (Member FINRA/SIPC) is the Dealer Manager for Prospect Credit REIT, LLC. Ultimus Fund Distributors, LLC is not affiliated with Prospect Capital Management, L.P.