NEW YORK, March 17 (Reuters) – Investors are offloading software loans in debt vehicles at a discount, in the latest sign of pain in the software industry, which is being upended by AI.
In recent weeks, several managers of collateralized loan obligations (CLOs) have started exploring ways to reduce their exposure to software, as they grapple with the prospect of a wave of rating downgrades on junk bonds and ​potential defaults down the line, according to three CLO managers and several credit industry analysts.
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The push to reduce exposure shows how the pain in private credit and software is still working through the system after the software rout in January ‌and February that was largely triggered by the release of Anthropic’s latest AI tools, which raised fears of widespread disruption across the technology and professional services industries.
Debt investors offloading exposure to software companies is latest sign of pain
