Goldman Tells Clients Eager to Short Loans Its Tool Isn’t Ready

Goldman Sachs Group Inc. has told clients eager to short leveraged loans that a product it’s developing to bet against the $1.4 trillion market isn’t yet ready.

The bank had been pitching hedge funds on a total return swap — a type of derivative that would allow clients to profit from a loan’s price decline without ever owning the underlying debt. Investors are increasingly looking to make money from the sell off in software debt sparked by fears of AI disruption.