The narrative about private credit is familiar by now — it’s a garbage heap of bad loans, waiting to ignite. Big banks have been busy refinancing loans made by private-credit firms. By putting their own balance sheets and brand names behind these deals, banks are validating the very underwriting they’ve spent months criticizing for being full of cockroaches. Alera replaced a 2021 private-credit loan with a cheaper one arranged by Goldman Sachs and Bank of Montreal. The weakest private-credit loans remain exactly where they started.