Private Credit’s CLO Machine Ramps Up in Push to Raise More Cash

Faced with a wave of redemptions and market turmoil, the private credit industry is leaning into a classic Wall Street maneuver: securitization.

Private credit firms are issuing collateralized loan obligations at a near record pace, despite unease over a potential rise in defaults and exposure to AI-threatened software firms. Issuance of the deals — which package private credit loans into bonds — has reached $9.5 billion so far this year, just shy of 2024’s record first quarter, according to data compiled by Bloomberg.