US banks raising borrowing costs for private credit funds as AI fears pummel valuations, sources say - Reuters

US banks are raising borrowing costs for private credit funds, according to sources cited by Reuters, as concerns about artificial intelligence's impact on valuations weigh on the sector. Private credit—loans made outside traditional banking channels—has grown into a major financing source for mid-market companies and infrastructure projects. The higher costs reflect lenders' caution about the funds' underlying asset quality amid broader market uncertainty driven by AI-related valuation pressures. This development could slow fundraising for private credit vehicles and increase expenses for portfolio companies that rely on this financing. The shift signals how macroeconomic headwinds and technology sector volatility are rippling through less-regulated corners of finance.