Fidelity Private Credit Fund Absorbs Restructuring Loss as Income Covers Its Payout

Direct-origination loan marks held near par with nothing on non-accrual, while cumulative offering proceeds have gone flat since early summer.

August 28, 2026

Fidelity Private Credit Fund reported net asset value per share of $24.69 for July as the completed restructuring of a broadly syndicated borrower pushed accumulated markdowns through to realized losses. The Boston-based business development company, advised by an affiliate of Fidelity, held aggregate net assets at roughly $1.4 billion as of July 31 and declared its August distributions at an unchanged rate.

A restructuring works its way through NAV

The $0.03 per-share decline in net asset value was the net of three offsetting moves:

• Realized losses of ($0.16) per share, driven primarily by the restructuring;
• Unrealized gains of $0.11 per share, unwinding earlier markdowns on the same credit and picking up monthly valuation marks on the loan book and on an interest rate swap tied to the Fund’s unsecured fixed-rate debt;
• Income accretion of $0.02 per share.

The Fund identified the restructured position as STG Distribution LLC, which represented 0.3 percent of fair value at the end of June and emerged from bankruptcy during July. Because the losses had already been carried as unrealized marks, the conversion left little net imprint on per-share value.

Net investment income of $0.21 per share fully covered the $0.19 per share distributed for the month, leaving the payout funded from earnings rather than from capital.

Credit quality and returns

Metrics on the directly originated book held up. The weighted-average mark on funded capital stood at 98.4, and the Fund reported no positions on non-accrual as of July 31. Both figures cover direct originations only and exclude mutual fund and other collective holdings. The clean non-accrual reading marks a change from the first quarter, when a small number of credits had moved onto non-accrual status.

Year-to-date total net return for Class I shares reached 3.78 percent. The Fund put that ahead of the Morningstar LSTA US Leveraged Loan Index by 157 basis points and the ICE BofA US High Yield Index by 219 basis points, and attributed the margin to limited software exposure, underwriting discipline and the monthly cash distribution. Valuation on direct loans runs monthly through a third-party agent working from unaudited reports on the underlying investments.

August distributions

The declaration held the gross monthly rate at $0.1750 per share across all three classes:

• Class I — $0.1750 net, no servicing fee;
• Class S — $0.1575 net, after a $0.0175 stockholder servicing fee;
• Class D — $0.1699 net, after a $0.0051 fee.

A variable supplemental distribution of $0.0160 per share was declared for every class, matching the supplemental rate the Fund has been setting since the spring. Both payments go to holders of record as of the open of business on August 31, with payment on or about September 30, in cash or reinvested through the distribution reinvestment plan.

Leverage keeps easing

The investment portfolio carried a fair value of about $2.5 billion against principal debt outstanding of $1.1 billion, for a debt-to-equity ratio of approximately 0.83 times. Leverage has come down steadily since the spring, from about 0.89 times at the end of April and 0.87 times at the end of May, with principal debt reduced from roughly $1.2 billion over the same stretch.

Share sales have gone quiet

Capital raising is where the picture has changed most. The Fund continues to offer up to $4.0 billion in shares on a continuous basis alongside a concurrent private offering. Through the August 1 subscription date, the two channels had together issued 55,848,224 shares for total consideration of $1,422.7 million. Class I shares in the public offering account for the overwhelming majority at 55,418,762 shares and $1,411.8 million, with a further 289,020 Class I shares and $7.3 million placed privately. Class S remains a rounding error at 139,931 shares, and Class D has drawn 511 shares.

Those cumulative totals sit close to the level the Fund reported through the June 1 subscription date, a pronounced deceleration from the roughly 900,000 shares added in the single month to June 1. The Fund said it intends to keep selling shares monthly, and furnished a July 2026 fact sheet alongside the disclosure.