Credit Markets Finally Crack As Private Credit Contagion Infects Public Markets

Back in October, when there were curiously little concerns about the public credit markets' exposure to the AI bubble, and very few had considered the massive exposure of the Private Credit market to the rapidly disrupted Software sector (which according to some accounts for as much as 35% of PC loans), we warned readers that "AI Is Now A Debt Bubble Too, Quietly Surpassing All Banks To Become The Largest Sector In The Market."

As we pointed out back then, according to JPMorgan, AI-related companies make up 14% of the Investment Grade Index with $1.2T in debt. Shockingly, this is now the largest sector within the IG index, exceeding Banks.