Private-equity backed software companies are rushing to extend maturing debt through "amend-and-extend" deals rather than full refinancings, as lenders demand higher yields and stricter terms amid fears of AI disruption. About $40bn of speculative-grade software debt matures in 2028, per Moody's. KKR's Jeremiah Lane said short extensions let lenders monitor borrowers' AI resilience while renegotiating terms.

Thoma Bravo-backed Proofpoint recently extended $4.3bn of debt by two years at a 9.3% yield — 1.5 percentage points above its prior rate — accepting creditor-friendly terms like mandatory quarterly calls and collateral protections. It left over $700mn unextended to avoid higher costs. Peer Sophos, also Thoma Bravo-owned, plans similar concessions for its $2bn+ refinancing in September.

Lenders are securing unprecedented concessions, including "omni-blocker" provisions to prevent asset-stripping, debt and dividend restrictions, and loan concentration limits. Lord Abbett's Kearney Posner noted investors want shorter exposure and tighter terms. While firms like Proofpoint and Sophos are "better houses in a bad neighbourhood," struggling peers face painful restructurings. Companies are voluntarily disclosing more metrics to placate nervous creditors.