Key Points
- JPMorgan is marking down collateral held by private credit firms and reducing their borrowing capacity — a preemptive move driven by market valuations, not actual loan losses.
- The markdowns target software company loans, where AI advances have sparked fears of disintermediation, triggering a private credit downcycle and abnormally high redemptions at firms like Blue Owl and Blackstone.
- The bank is potentially among the first major lenders to pull in leverage to the private credit industry, in a move that mirrors steps taken during Covid, said a person with knowledge of the matter.
