Bond Maturity Wall Looms, Software Sector Woes in Private Credit Market May Worsen

The software industry's problems, which have recently turned the private markets upside down, are about to face a major test as a wave of debt maturities approaches. By the end of 2028, over $330 billion in high-yield bonds, leveraged loans, and software and technology debt linked to business development companies will come due, a significant portion of which is associated with companies owned by private equity investors. As these companies seek refinancing in the coming months, they will face numerous headwinds, including concerns that artificial intelligence (AI) could weaken or even replace their products, and the risk that the conflict in the Middle East will drive up borrowing costs.