The Next Shoe To Drop: As Private Credit Crisis Spreads, All Eyes Turn To CLOs

For those who have been living under a rock, the past two months have seen a spectacular collapse in anything - and everything - private credit related, with investors seeing banks mark down portfolios and restrict lending, and we’ve even seen private credit funds respond with providing their own daily marks to assuage concerns around valuation transparency. We reached a culmination last week when investors redemption requests for two Blue Owl Private Credit funds (the Blue Owl Technology Income Fund and the Blue Owl Credit Income Corp) - the same company which we as we explained before started the entire liquidation firesale that has spread like wildfire through the sector - hit a mindblowing 41% and 22% respectively, sending various publicly traded private credit/BDC securities to record lows.