Matt Levine’s Money Stuff: Private Credit Gets Marked Down

Private credit marks

Let’s say I lend a software company $100 for five years at 8% interest. I give the company $100 in cash, and it gives me back a note promising to pay me back, which I enter into my accounting system as a $100 asset. The next day, Anthropic releases some new artificial intelligence tool, people get nervous about the software business, and software stocks and bonds drop. The yields on loans to other software companies, companies that are similar to my borrower, go up by 0.5% over the course of the day. I call up my borrower to ...