AI Fears Weigh On Software Loan Market

Bloomberg reports this week that loans to software companies fell sharply as investors worry advances in AI, including Anthropic’s Claude, could make products and services obsolete. Prices on loans for Cloudera, Dayforce and Rocket declined — Cloudera’s loan dropped 7 cents on the dollar — and software accounts for 12% of the Bloomberg Leveraged Loan Index, with the sector posting the worst CLO returns. The selloff could pressure CLO portfolios and complicate an expected borrowing surge to fund AI initiatives.