Quantifying Software Risk In CLOs

FTSE Russell1.06K FollowersFollow5ShareSavePlay(21min)CommentsSummarySharp loan price selloff due to AI disruption fear rocked the CLO market with 16% software exposure.From early January to end of February, the software loans saw a steep drop of over 7pts, while market overall saw a modest 2pts decrease in the same period.Private Credit CLOs hold significantly higher software exposure than BSL deals, but downgrade risk is being offset by enhanced structural protection. Andrii Dodonov/iStock via Getty Images By Miles Li, Research Manager - D&A - Analytics | Loy Weng, Director, CMBS Model Quantitative Developer, Research - D&A - Analytics | Luke Lu, Head of Credit Research and Quantitative Modeling - D&A - AnalyticsThis article was written byFTSE Russell1.06K FollowersFollowFTSE Russell is a leading global provider of index and benchmark solutions, spanning diverse asset classes and investment objectives. As a trusted investment partner we help investors make better-informed investment decisions, manage risk, and seize opportunities.Market participants look to us for our expertise in developing and managing global index solutions across asset classes. Asset owners, asset managers, ETF providers and investment banks choose FTSE Russell solutions to benchmark their investment performance and create investment funds, ETFs, structured products, and index-based derivatives. Our clients use our solutions for asset allocation, investment strategy analysis and risk management, and value us for our robust governance process and operational integrity.For over 40 years we have been at the forefront of driving change for the investor, always innovating to shape the next generation of benchmarks and investment solutions that open up new opportunities for the global investment community.