Weekly Market Summary

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• Software issuance has fallen sharply in the US broadly syndicated loan (“BSL”) market, with the sector accounting for just 9% of year-to-date volume excluding repricings at its lowest share since 2013. The retrenchment is especially pronounced in PE-backed lending, where software’s share has dropped to 9% from 21% last year, underscoring a broader shift toward a more selective “haves and have-nots” market.
• The shift is most visible in the LBO market. Software accounted for 34.5% of US BSL LBO financing last year, underscoring PE’s long-held conviction in the sector’s recurring revenue, margin profile, and scalability. That share has since dropped to 17.5%, a decade low, as AI disruption concerns challenge the investment case that once made software the market’s favored buyout target.
• Healthcare has overtaken software as the leading sector in institutional loan issuance for the first time since 2015, accounting for 14% of 2026 BSL volume. Software has fallen to just 7.4% of BSL transactions excluding repricings, roughly half its 2025 share and long-term average, while Healthcare has climbed to 8.8%, underscoring a broader shift in new-money lending away from software.
• The key question now is what happens to software borrowers facing looming maturities that cannot grow into their capital structures. Market consensus suggests the path forward will hinge on two factors: whether the underlying software assets retain their value, and whether the sponsor remains committed to supporting the borrower. If both conditions hold, amend-and-extend transactions are likely to be the first option. These deals allow borrowers to push out maturities in exchange for lender compensation, typically in the form of fees and wider spreads, and often require fresh sponsor equity to pay down debt and reduce lender exposure.

Source: Pitchbook LCD as of 6/8/26.