JPMorgan Cuts Risk in Software‑Loan Backed Deals

JPMorgan Chase has lowered the value of loans it holds as collateral, mainly those given to software companies, in its private‑credit financing arm. The change means that firms using these loans for “back‑leverage” will have less room to borrow and may need to lock up more assets. The bank’s move signals a cautious stance before any sharp fall in the value of software‑sector loans. Jamie Dimon, who has steered JPMorgan through past crises, is known for warning executives about borrowers’ repayment risks. Software firms are under pressure as new AI models from OpenAI and Anthropic threaten to disrupt existing services. This has led investors to pull money from private‑credit funds, causing large redemptions at places like Blue Owl and Blackstone.The adjustments happen in a part of JPMorgan’s business that is considered high‑risk because it stacks layers of debt. By reducing the collateral value, the bank is tightening its exposure and discouraging excessive borrowing. The exact amount of loans affected or the size of the markdowns is unclear, but this appears to be one of the first major banks to take such a step. The action is described as financial discipline rather than a reaction to actual losses, aimed at staying ahead of market shifts. JPMorgan had previously tightened leverage during the early Covid period, showing a pattern of proactive risk management.