onlycfo.io · 2026-03-14 · 82d

The Software Debt 'Maturity Wall' Looms | Who Will Survive?

A $40B debt maturity wall in software companies is approaching 2028–2029, driven by loans issued at peak valuations and low rates that now face refinancing headwinds from higher interest rates, AI-driven valuation compression, and weakening fundamentals. PE-backed and leveraged companies will face aggressive cost-cutting, equity value destruction, and exit constraints, with 'amend and extend' tactics merely delaying insolvency risks through paid-in-kind interest and higher covenant requirements.

19 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

Debt Leverage Ratio (Historical LBO Entry)

2–3x ARR

downside

PE-backed software companies LBO structure from prior 5–7 years

Debt Maturing 2028

~30billion USD

B- and lower rated software debt coming due in 2028

Debt Maturing 2029

~32billion USD

B- and lower rated software debt coming due in 2029

Debt Rating Distribution (Software)

50percent

Software debt rated B- or lower; represents elevated distress risk

Default Rate Potential (Private Credit Software Portfolios)

15percent

target

UBS strategist projection for software-heavy private credit portfolios (vs. historic 1–2%)

Downside SaaS Exit Multiple

2x ARR

minimum

Conservative exit multiple needed to cover debt; previous standard was 2-3x ARR

EBITDA Multiple (Historical LBO Entry)

5–7x

average

Software LBO valuations 5–7 years ago

Original LBO Multiple

5x EBITDA

Typical leverage multiple for software LBOs made 5-7 years prior; range 5-7x EBITDA

PE-Backed Software Companies Requiring Refinance

2000count

Estimated PE-backed software companies facing debt maturity decisions

PE-Backed Software Companies Requiring Refinance

2000companies

Total PE-backed software companies facing refinancing pressure

PIK Interest (Paid-In-Kind) Usage

All-time high

peak

Private credit market, indicating refinancing stress

Private Credit Exposure in Software

25percent

Software companies as % of total private credit deployment

Private Credit Redemption Requests

15percent of NAV

Blue Owl redemption requests; exceeds typical 5% quarterly cap

Private Credit Redemption Requests

5percent

cap

Typical quarterly redemption limit; recent requests surging above

Software Debt Maturing

40billion USD

Total software debt maturing 2028-2029; primarily B-rated paper

Software Default Rate Forecast

15percent

target

UBS strategist estimate for default rates in software-heavy private credit portfolios; vs. historic 1-2%

Software Share of Private Credit

25percent

Software represents ~25% of all private credit exposure

US Software Loans Distressed (January 2026)

25billion USD

Recent distressed US software debt cohort

US Software Loans in Distress (Jan 2026)

25billion USD

Value of US software loans that slid into distress in January 2026