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Story summary
- Software-loan investors sell at discounts to reflect distress in the software sector from AI disruptions.
- Collateralized loan obligation (CLO) managers reduce exposure to software, with CLO holdings estimated at risk between $40 billion and $150 billion.
- Major U.S. banks tighten lending as private-credit funds cap withdrawals amid rising investor scrutiny.
- Analysts expect a 25% decline in CLO loan supply this year due to concerns about loan quality and wider spreads.
