Thoma Bravo is struggling to refinance a $5bn loan for its cyber security portfolio company Proofpoint, which it bought for over $12bn in 2021. The amend‑and‑extend deal, led by Goldman Sachs, aimed to push maturity to 2030 but investors demanded higher yields and tighter protections, citing AI‑driven competition risk.

A leveraged‑loan investor said, “The fear is that AI will drive more competition into the cyber security industry and eventually erode Proofpoint’s margins.” Thoma secured enough demand just before a 5 pm ET deadline, and the facility is expected to close Wednesday with a yield of almost 9.3 % at maturity, 4.5 percentage points above SOFR, versus 3 points on existing debt.

S&P upgraded Proofpoint to B, citing bullish revenue forecasts, yet a second investor warned, “If Proofpoint is struggling to attract lenders, the rest of the market doesn’t stand a chance.” Private‑equity‑backed software firms face heightened scrutiny as lenders worry AI can replicate their products, cutting deal activity and pushing loan values down about 7 % this year. In June a Blackstone‑led consortium took control of Medallia from Thoma Bravo in one of the largest PE wipeouts, and a glut of low‑rate Covid‑era debt maturing in the next two years adds pressure.