AI-Exposed Lenders Show Early Credit Warning Signs, Moody’s Says

Artificial intelligence is becoming a bigger fault line in credit markets, according to a Moody’s Analytics report that points to emerging signs of broader strain among exposed lenders.

Business development companies, or BDCs, with 15% or more of their portfolios in the software or information technology sectors — a proxy for AI exposure — posted year-to-date equity value declines of 16.8%, Moody’s Asset Management Research said in the report published Wednesday. That compares with an average decline of 8.1% for vehicles with less than 10% exposure.