NEW YORK, March 10, 2026, 11:26 EDT.
Goldman Sachs is offering hedge funds a way to go long or short on corporate loans, according to a person familiar with the matter who spoke to Reuters. The new angle: a total return swap—this derivative lets investors bet on a loan’s price swings without actually holding the debt. No trades have gone through yet. AI-related jitters are filtering into credit, with software-sector loans on the radar. Goldman said it partners with clients on trading ideas across asset classes, regardless of market backdrop. Reuters
This isn’t just about tech names, according to Goldman. The AI ripple effect could hit far outside those stocks. Mahesh Saireddy, co-head of Goldman’s Capital Solutions Group, flagged “a lot of unknowns” ahead for lenders, pointing to the next two years as AI concerns move from stocks into credit and capital-raising. Reuters
Goldman’s sales pitch comes as Wall Street steps up its push into private credit—the rapidly expanding business of lending to companies outside the public bond market, where risks tend to run higher. Bank of America has earmarked $25 billion for private credit, according to Reuters. JPMorgan is in for $50 billion. Citigroup, meanwhile, joined forces with Apollo on a $25 billion direct-lending venture this year. Reuters
It’s not just banks feeling the heat. “The trigger” for private-equity and asset-management stocks sliding was a wave of software selling and jitters around loan risk, said Nationwide chief market strategist Mark Hackett to Reuters in February. Wasif Latif at Sarmaya Partners pointed to the AI trade “subsuming parts of the market.” Blackstone, Apollo, Blue Owl, Carlyle, KKR, and Ares all landed under the microscope. Reuters
Issuance is taking a hit, too. On Feb. 23, Reuters reported there were no leveraged loan deals from the software sector in the works—borrowers are sitting tight, holding out for existing debt prices to bounce back. UBS’s Matthew Mish, head of credit strategy, flagged AI disruption risk as a particular threat for lower-quality credit sectors in the U.S. Reuters
According to Morgan Stanley, software names make up about 16% of the $1.5 trillion U.S. loan market. Around half of that chunk is rated B- or lower—highlighting a bigger default threat. Still, the bank doesn’t see defaults jumping in the short run, but it does flag a setup for increased price swings. Reuters
Goldman’s credit unit has been bracing for this pressure. In a Feb. 27 letter to investors reviewed by Reuters, the bank pegged GS Credit’s enterprise software credit exposure at roughly 15.5% as of the third quarter—toward the lower bound compared to rivals. The letter also cautioned: “We do not underestimate the risk of AI disruption.” Reuters
Still, scaling up the trade won’t be easy. According to the Financial Times, shorting individual loans is tricky—contracts are customized, and trading rules depend on the specific deal. That’s kept this part of the market clunky, even as bearish sentiment has picked up. Financial Times
Private credit nerves are showing. Blue Owl saw record short interest this month, sparked by asset sales and fresh fund curbs that revived old questions about liquidity and credit quality. Blackstone’s BCRED, the firm’s flagship, took a $3.7 billion hit from client redemptions in the first quarter. The risk? If bearish bets start to ripple through a market already uneasy about liquidity, the pressure could escalate fast. Goldman shares rose roughly 0.9% in early New York trading Tuesday. Reuters
