2026-02-05 08:20:41

Stress in the US tech credit market is surging:

14.5% of tech loans are now distressed, the highest since the 2022 bear market.

At the same time, the tech bond distressed ratio is up to 9.5%, the highest since Q4 2023.

These metrics show the portion of loans and bonds that are in default or at high risk of default.

Both ratios have risen +4 percentage points year-to-date.

As a result, software debt in collateralized loan obligations (CLOs) recorded a -2.5% decline in January, the biggest drop in at least 12 months and the worst return among all sectors.

Software is one of the largest sectors of the leveraged loan market, reflecting 12% of the Bloomberg US Leveraged Loan Index.

Tech credit stress is rising at an alarming pace.

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.