Business development company expands lending base while trimming exposure to broadly syndicated loans amid declining benchmark rates.

May 11, 2026

Fidelity Private Credit Fund disclosed first-quarter results showing accelerated portfolio growth, sharply higher investment income, and continued repositioning toward directly originated middle-market loans. Falling benchmark rates compressed yields, and a small subset of credits moved onto non-accrual status, but the Boston-based business development company managed by Fidelity Diversifying Solutions LLC reported strong overall results for the three months ended March 31, 2026.

Total investment income reached approximately $58.8 million for the quarter, an increase of nearly 42 percent from $41.3 million a year earlier. Management attributed the gain primarily to portfolio expansion, which more than offset a 66-basis-point decline in the weighted average yield on debt at fair value. Interest income alone climbed to $54.0 million from $39.4 million, while dividend income jumped to $3.5 million from $1.1 million, reflecting larger holdings in an affiliated floating-rate central fund.

Net investment income before taxes rose to $30.3 million from $22.9 million, and the net increase in net assets from operations totaled $22.7 million, up from $14.6 million. After distributions to common shareholders of roughly $30.7 million, total net assets ended the period at approximately $1.33 billion, up from $1.28 billion at year-end 2025.

Portfolio Composition and Yield Dynamics

The Fund closed the quarter with an investment portfolio valued at approximately $2.49 billion across 121 portfolio companies, compared with $2.29 billion as of December 31, 2025. First-lien debt remained the cornerstone of the strategy at 90.4 percent of fair value, or roughly $2.25 billion. Equity holdings, asset-backed securities, preferred securities, and a newly added unsecured debt position rounded out the mix, alongside money-market and fixed-income mutual fund allocations used for liquidity management.

Floating-rate exposure dominated, with 99.6 percent of debt investments at fair value tied to floating benchmarks. The weighted average yield on debt slipped to 9.05 percent at fair value, down from 9.71 percent a year earlier. The Fund noted that the Secured Overnight Financing Rate moved from approximately 4.30 percent in early 2025 to roughly 3.70 percent during the first quarter of 2026, pressuring coupon income.

By industry, the top five exposures by fair value were:

• Health Care Services — 14.3 percent
• Diversified Financial Services — 9.4 percent
• Application Software — 7.9 percent
• Specialized Consumer Services — 7.7 percent
• Diversified Support Services — 7.6 percent

Geographically, U.S. borrowers accounted for 97.9 percent of fair value, with smaller allocations to Australian, Canadian, Luxembourg, and Grand Cayman issuers.

Credit Quality and Strategic Repositioning

The Fund disclosed that three investments across two broadly syndicated loan borrowers had moved to non-accrual status by quarter-end, a shift from year-end 2025, when no positions were on non-accrual. Management emphasized that no private credit borrowers were affected. The portfolio team executed sales of several broadly syndicated loans during the quarter, generating realized losses of about $2.3 million — characterized as a deliberate effort to reduce exposure to liquid-market volatility rather than reflecting deterioration in directly originated positions.

Net change in unrealized depreciation totaled $5.4 million, including roughly $3.1 million tied to holdings in an affiliated floating-rate mutual fund and $1.5 million linked to interest-rate swaps used to align floating-rate assets with fixed-rate debt obligations.

Using the Fund’s internal one-to-five credit rating scale, approximately $2.14 billion of debt investments at fair value carried a rating of 2, indicating performance in line with underwriting expectations. Roughly $118.7 million was rated 3, signaling closer monitoring, while $10.9 million carried the lowest rating of 5.

Capital Structure and Financing Activity

Total outstanding borrowings stood at approximately $1.15 billion at quarter-end, up from $1.04 billion at year-end. The asset coverage ratio measured 215 percent, comfortably above the 150 percent regulatory minimum but down from 222 percent. The weighted average cost of borrowings declined to 5.85 percent from 6.18 percent.

The Fund operates three revolving credit facilities and two series of senior unsecured notes:

• A JPMorgan-led facility with $1.14 billion in commitments and $419.9 million drawn
• The BSPV facility with BNP Paribas, carrying $300.0 million drawn against $400.0 million committed
• The CSPV facility administered by Citibank, with $225.0 million drawn against $250.0 million committed
• $105.0 million of 6.15 percent Series 2025A Notes due 2028
• $105.0 million of 6.5 percent Series 2025B Notes due 2030

On January 7, 2026, the Fund amended the CSPV facility to extend the reinvestment period to December 2028, push the maturity date to December 2030, and reduce the applicable interest margin by 35 basis points. Unfunded loan commitments rose to approximately $518.8 million from $474.6 million, reflecting active deployment into delayed-draw term loans and revolving facilities.

Shareholder Activity, Distributions, and Repurchases

The Fund continued its continuous public offering, with Class I subscriptions of approximately $84.1 million during the quarter, alongside modest activity in Class S and Class D shares. Distributions reinvested through the dividend reinvestment plan totaled roughly $16.1 million across all classes.

Monthly distributions to Class I shareholders totaled $0.5730 per share for the quarter, down from $0.6525 a year earlier, reflecting the lower-rate environment. Class S and Class D shareholders received $0.5196 and $0.5574 per share, respectively. Net asset value per Class I share closed the period at $24.95, compared with $25.10 at year-end 2025.

Under the share repurchase program, the Fund completed a tender offer for up to 5 percent of outstanding shares, repurchasing approximately 1.43 million shares at $24.95 per share for a total of $35.6 million, equal to 2.81 percent of shares outstanding at the close of the prior quarter. All repurchase requests were satisfied in full.

Outlook

Management indicated that available cash, capacity under existing credit facilities, and ongoing share issuances should provide adequate liquidity for the near term. The Fund also referenced its Expense Limitation Agreement with its adviser, capping certain operating expenses at 0.70 percent of average net assets on an annualized basis through April 30, 2026, with automatic renewal provisions thereafter.