Jamie Dimon, chief executive officer of JPMorgan Chase & Co., during the America Business Forum in Miami, Florida, US, on Thursday, Nov. 6, 2025.

Eva Marie Uzcategui | Bloomberg | Getty Images

JPMorgan Chase is reducing its exposure to the private credit industry by marking down the value of loans held by the bank as collateral, according to a person with knowledge of the moves.

The bank’s giant Wall Street trading division has reduced the value of loans — most of which were made to software firms — sitting within the financing portfolios of private credit clients, said the person, who declined to be identified speaking about the client interactions.

JPMorgan’s move indicates the biggest U.S. bank by assets wants to get ahead of potential turbulence involving private credit loans to software companies. CEO Jamie Dimon, who has guided his bank through multiple crises in his two decades atop JPMorgan, is known to constantly remind his executives about the risk that borrowers won’t be able to repay their loans.

Software firms have come under scrutiny in recent months as model updates from OpenAI and Anthropic drive concerns that some providers will be disrupted by AI. The worries have ignited a downcycle for private credit players as retail investors yanked funds in recent weeks, driving abnormally high redemptions at firms including Blue Owl and Blackstone.

The adjustments were made in JPMorgan’s financing business, where private credit firms borrow money to amplify fund returns in what’s known as “back-leverage.” The business is considered relatively risky because it layers leverage upon leverage — amplifying losses when the underlying loans sour.

By marking down the collateral for that leverage, JPMorgan is reducing the ability of private credit firms to borrow against their loans, and in some cases could even force firms to post more collateral.

The size of the loans impacted and the extent of the markdowns at JPMorgan couldn’t be determined.

JPMorgan is potentially the first major bank to take such steps, according to the FT, which was first to report the bank’s markdowns.

The moves are a preemptive step driven by changes in market valuations rather than actual loan losses, said the person with knowledge of the bank, who characterized the move as financial discipline, “rather than waiting until a crisis comes.”

JPMorgan previously pulled back leverage to the industry during the early days of the Covid pandemic, according to the person.

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The post JPMorgan reins in lending to private credit firms, marks down software loans appeared first on Our Story Insight.

Blue Owl BDC’s CEO Craig Packer speaks during an interview with CNBC on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., Nov. 19, 2025.

Brendan McDermid | Reuters

The latest tremor in the private credit world involved a deal that should’ve been reassuring to markets.

Blue Owl, a direct lender specializing in loans to the software industry, said Wednesday it had sold $1.4 billion of its loans to institutional investors at 99.7% of par value.

That means sophisticated players scrutinized the loans and the companies involved and felt comfortable paying nearly full price for the debt, a message that Blue Owl co-President Craig Packer sought to convey in interviews several times this week.

But instead of calming markets, it sent shares of Blue Owl and other alternative asset managers diving on fears of what could follow. That’s because as part of the asset sale, Blue Owl announced it was replacing voluntary quarterly redemptions with mandated “capital distributions” funded by future asset sales, earnings or other transactions.

“The optics are bad, even if the loan book is fine,” Brian Finneran of Truist Securities wrote in commentary circulated Thursday. “Most investors are interpreting the sales to mean that redemptions accelerated and led to forced sales of higher quality assets to meet requests.”

Blue Owl’s move was widely interpreted as the firm halting redemptions from a fund under pressure, even as Packer pointed out investors would get about 30% of their money back by March 31, far more than the 5% allowed under its previous quarterly schedule.

“We’re not halting redemptions, we’re just changing the form,” Packer told CNBC on Friday. “If anything, we’re accelerating redemptions.”

Coming amid a broad tech and software selloff fueled by fears of AI disruption, the episode shows that even apparently strong loan books aren’t immune to market jitters. This in turn forces alternative lenders to scramble to satisfy shareholders’ sudden demands for the return of their money.

It also exposed a central tension in private credit: What happens when illiquid assets collide with demands for liquidity?

Against a backdrop that was already fragile for private credit since the collapse of auto firms Tricolor and First Brands, the fear that this could be an early sign of credit markets cracking took off. Shares of Blue Owl fell Thursday and Friday. They are down more than 50% in the past year.

Early Thursday, the economist and former Pimco CEO Mohamed El-Erian wondered in social media posts whether Blue Owl was a “canary in the coal mine” for a future crisis, like the failure of a pair of Bear Stearns credit funds in 2007.

On Friday, Treasury Secretary Scott Bessent said that he was “concerned” about the possibility that risks from Blue Owl had migrated to the regulated financial system because one of the institutional buyers was an insurance company.

Mostly software

With skepticism over loans to software firms running high, one question from investors was whether the loans they sold were a representative slice of the total funds, or whether Blue Owl cherry-picked the best loans to sell.

The underlying loans were to 128 companies across 27 industries, the largest being software, the firm said.

Blue Owl indicated it was a broad swath of overall loans in the funds: “Each investment to be sold represents a partial amount of each Blue Owl BDC’s exposure to the respective portfolio company.”

Despite its efforts to calm markets, Blue Owl finds itself at the nexus of concerns around private credit loans made to software firms.

Most of the 200-plus companies Blue Owl lends to are in software; more than 70% of its loans are to that category, executives said Wednesday in a fourth-quarter earnings call.

“We remain enthusiastic proponents of software,” Packer said on that call. “Software is an enabling technology that can serve every sector and market and company in the world. It’s not a monolith.”

The company makes loans to firms “with durable moats” and is protected by the seniority of its loans, meaning that private equity owners would need to be wiped out before Blue Owl saw losses.

But, for now at least, the problem Blue Owl faces is one of perception bleeding into reality.

“The market is reacting, and it becomes this self-fulfilling idea, where they get more redemptions, so they have to sell more loans, and that drives the stock down further,” said Ben Emmons, founder of FedWatch Advisors.

The post Blue Owl software lending triggers another quake in private credit appeared first on Our Story Insight.

Wepro | Moment | Getty Images

A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.

A specific kind of loan that helps owners of commercial buildings pay for big upgrades to save energy or water, add renewable power, or improve resilience is seeing huge growth in a lending environment that has been arguably tough.

This month, Nuveen closed a $465 million C-PACE deal for The Geneva, a landmark office-to-residential conversion in Washington, D.C. The transaction represents the largest C-PACE financing in history. 

C-PACE, which stands for commercial property assessed clean energy, is a type of financing that differs from a traditional bank loan. It operates at the state level, requiring local leaders to pass enabling legislation. The amount of the loan is added to the property’s tax bill and repaid over a long period (often up to 20 or 30 years). This can make energy-saving projects more affordable, because the payments are spread out, typically at fixed rates, and the upgrades can lower operating costs and increase property value.

Between 2009 and the end of 2024, cumulative C-PACE investment reached nearly $10 billion, according to PACENation, a nonprofit that says it advocates for C-PACE financing. 

Growth, however, has really accelerated over the past five years — with C-PACE lending posting double-digit gains — as more states pass policies enacting the program and more owners and lenders adopt the tool for financing projects. Currently 40 states have C-PACE policies with 32 active programs, up from six active programs in 2015.

Nuveen closed $2.1 billion in C-PACE loans across 53 deals in 2025 alone and has originated over $5 billion in total. In September Nuveen closed on its now-second-largest C-PACE transaction to date at $290 million for the Pendry Hotel & Residences in Tampa, Florida. The closing also marked the first C-PACE financed transaction in the city of Tampa.

Nuveen said upgrades financed by its C-PACE lending have saved over 300,000 metric tons of carbon dioxide. 

But it’s not all about the environment, and lenders are quick to admit that, especially as political winds shift away from decarbonization.

Get Property Play directly to your inbox

CNBC’s Property Play with Diana Olick covers new and evolving opportunities for the real estate investor, delivered weekly to your inbox.

Subscribe here to get access today.

“The underlying need of making properties more resilient, more efficient to operate, really doesn’t go away,” said Alexandra Cooley, CEO and CIO of Nuveen Green Capital, an affiliate of Nuveen. “Actually, the vast majority of the projects that we see — the last I checked it was 97% — are some combination of either energy efficiency, which is cutting costs of operating the property, or climate resiliency. So a very small percentage is actually renewable energy.” 

It is the mechanism, really, that is increasingly attractive to lenders in a higher-for-longer interest rate environment, in which economic policy uncertainty has hit traditional CRE bank lending hard. For institutional clients that want long-term, fixed-rate exposure, it’s appealing because C-PACE loans are secured by a senior tax assessment on a piece of real property. 

“Our borrower is really the property itself, not necessarily the owner of that property at any given moment. So, it’s safer, and it enables our investors, who are long-term investors, to have that duration,” Cooley explained.

Another major player in the space, Peachtree, closed its largest C-PACE deal, a $176.5 million loan for the Rio Hotel & Casino in Las Vegas, Nevada, for renovations that were actually completed in 2024. The loan was structured to finance these renovations retroactively, so the owners could reduce their senior loan obligations, another benefit of the C-PACE product. 

“They can be utilized as a rescue capital mechanism, where you just recently opened a new development project, a new development hotel property, a multifamily property, any type of commercial real estate property, and you could technically do a retroactive C-PACE loan to help recapitalize that project and help pay down the bank or the lender that financed the project,” explained Greg Friedman, CEO of Peachtree Group. 

Friedman said he sees C-PACE as an economic development tool at a time when “capital markets for commercial real estate have been broken.” 

“Banks make up 50% of the commercial real estate lending market. Banks tend to be the lender of choice for new construction, new development projects, and they’re just not lending at the same level,” he said. 

C-PACE is very profitable for Peachtree as a business, Friedman said, because the company can aggregate and securitize the loans. 

“We have a lot of insurance companies that will invest into these securitizations,” he added.

While C-PACE lenders are less focused on the “green” aspects of the loan, they are still drawn in by the “resilience.” 

C-PACE loans can be made in order to fund energy efficient upgrades, which saves money overall and makes the building more valuable, but they can also be done for upgrades to the building’s resilience. That includes against flood, fire and even earthquakes. That is also appealing to investors as climate disasters become ever more extreme.

Cooley said she sees three things driving expansion in the space: More states adopting C-PACE programs, market education and awareness, and investor interest. 

“As institutional investors have come in, the cost of capital and the structure of C-PACE has become a lot more compelling for the commercial real estate industry,” she said. 

The post C-PACE CRE lending is suddenly seeing record deals appeared first on Our Story Insight.