JPMorgan Chase has taken steps to reduce its exposure to private credit by marking down the value of loans used as collateral, particularly those tied to software companies. The move reflects a more cautious stance as the bank responds to weakening market valuations in parts of the software lending market. By lowering the value of these loans within financing portfolios, JPMorgan is tightening lending conditions for private credit firms that rely on back-leverage to boost returns. The change reduces borrowing capacity and, in some cases, may require firms to post additional collateral.
The adjustment comes as software borrowers face closer scrutiny amid concerns that advances in artificial intelligence could disrupt parts of the sector and pressure loan performance. Those concerns have contributed to a pullback in private credit tied to software, alongside elevated redemptions at firms including Blue Owl and Blackstone. JPMorgan’s actions suggest the bank is moving early to protect itself from further volatility in a market where layered leverage can quickly magnify losses.
