March 12 (Reuters) – JPMorgan Chase has restricted lending to private credit providers after the bank marked down the value of certain loans in the firms’ portfolios, Bloomberg News reported on Wednesday.
The move from the largest U.S. lender extends a flurry of jitters across the roughly $2 trillion private credit market, with Wall Street juggernauts facing heightened withdrawal requests in recent weeks.
The marked-down loans are to software companies, which have drawn a large share of private funding over the past two decades, according to the report.
The decision has impacted a small cohort of JPMorgan’s borrowers, the report said. It added that the lender reserved the right to revalue private credit assets at any time.
JPMorgan declined to comment on the report.
Shares of the bank were down 1.2% before the bell, amid a selloff in the broader market. [.N]
Concerns over credit quality – highlighted last year by the collapses of First Brands and subprime lender Tricolor – have intensified in recent months as investors worried about AI-powered products’ threat to software companies’ pricing power.
The rush to liquidity has prompted several large players, including rival Morgan Stanley and BlackRock, to limit redemptions as requests for key funds crossed the 5% threshold, which conventionally allows an asset manager to do so.
Some, like Blackstone, have responded by relaxing the limit to 7% or beyond.
The move has not triggered any material margin calls so far, the report added, citing people familiar with the matter.
(Reporting by Ateev Bhandari in Bengaluru; Editing by Leroy Leo)
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