Credit Perspectives Q1 2026

Q1 2026 saw significant market volatility driven by Middle East conflict and AI disruption fears in the software sector. CVC Credit remains underweight software, focusing on defensive, diversified portfolios as spreads widen and dispersion increases.

Key Takeaways

• 1.The outbreak of conflict between the U.S., Israel, and Iran has caused significant market dislocation and high commodity price volatility.
• 2.AI-driven disruption concerns led to a sharp 20% decline in software stocks and widening credit spreads for software issuers.
• 3.Despite macro volatility, credit fundamentals remain resilient with low default rates (HY at 1.7% and loans at 1.4%).

Table of Contents

• Executive Summary
• CVC Market Update
• Market Update Q1 2026 | Markets largely flat amid geopolitical turbulence
• Liquid Credit
• Private Credit
• Important Information