Moody's Ratings has cut its outlook on a $36-billion Blue Owl fund to "negative" from "stable", citing redemption requests that were "significantly higher" than peers in the first quarter.

The action marks the latest response by a ratings agency on funds in a private credit market stung by redemption waves.

Jitters have spilled onto Wall Street, with several funds capping withdrawals and some major U.S. banks tightening lending to the $2-trillion industry.

Moody's said the Tuesday change in outlook on Blue Owl Credit Income Corp. (OCIC), one of Blue Owl's larger funds, is also due to the majority of the redemptions requested being from a very limited number of investors, revealing some concentration in the equity holder base.

Last week, the private credit firm said it would limit withdrawals from two of its funds after receiving a historic level of redemption requests in the first quarter. Investors sought to redeem an unspecified 21.9% of their OCIC shares, but the firm said it plans to fulfill only 5% of the requests.

OCIC, in a letter filed with the SEC related to a recent tender, said it is confident it remains "well-positioned to capitalize in the current market environment." It added that redemptions represent less than 1% of the fund's total assets under management and that about 90% of investors did not request to redeem.

Blue Owl has previously said there was a "meaningful disconnect" between public sentiment on private credit funds and the underlying performance of its portfolio.

Moody's said the company's decision to honor redemptions only for 5% of shares would keep net outflows contained in the first quarter, but expects elevated redemptions to persist in the coming quarters and inflows to slow further, resulting in the dissipation of OCIC's currently strong capital and liquidity positions.

Earlier on Tuesday, Moody's revised its outlook on U.S. business development companies (BDCs) to negative from stable, citing rising redemption pressures, higher leverage, and weakening access to funding markets.

In March, S&P Global revised the outlook on Cliffwater LLC's $33 billion flagship private credit fund to negative from over higher investor redemption requests.