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Weekly Market Summary
Oct 5 to Oct 9,2026
Extra Credit*
•Private credit lenders are pulling back from software after years of heavy exposure. Most software deals completed in 2026 have been refinancings or extensions supported by existing lenders, while attracting new capital to legacy credits has become more difficult. Financing remains available for borrowers offering lower leverage, higher spreads, or compelling AI-related growth stories, but software’s share of PE-backed direct lending deals has fallen to 12% from 16% last year.
•Private credit’s retreat from software is even more evident by deal volume. Software represents just 15% of PE-backed direct lending volume in 2026, down from 22% last year and a 27% peak in 2020 and 2022. With lenders more cautious on the sector, bankers increasingly need to bring together dozens of lenders to finance deals that once attracted abundant private capital.
•Private credit faces a sizable software maturity wall in 2027 and 2028, with billions of dollars in loans held by business development companies (BDCs) coming due. Refinancing prospects are likely to vary widely based on subsector, leverage, and underlying credit quality. Some borrowers have already restructured their loans, and more restructurings could emerge as maturities approach.
Source: PitchBook
A business development company (BDC) is a regulated, closed-end investment vehicle that raises capital from the public to invest in small, mid-sized, or financially distressed private companies.
Previous reports
*Source: Morningstar®, Bloomberg, Credit Suisse. OAS is Options Adjusted Spread. 4-year discount margin is used for spread for bank loans. Yield quoted is yield-to-worst or equivalent calculation. YTD Low / High for yields are based on end of week and not intraday movements. Indexes and sub-indexes: Investment-grade corporates represented by Bloomberg US Corporate Bond Index. High-yield bonds represented by Bloomberg US Corporate High Yield Index. Bank loans represented by Morningstar LSTA US Leveraged Loan Index. The red and green arrows depicted under Yields, Option Adjusted Spreads, and Prices indicate a higher or lower value from the previous week.
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