Two major loan defaults are intensifying losses in private-credit funds, highlighting mounting problems in the buyout lending market. Software maker Medallia and dental-services provider Affordable Care have failed to repay loans, triggering concerns about the broader private capital ecosystem that flourished during the postpandemic era.

Medallia cannot repay approximately $3 billion in loans from firms including Blackstone and KKR. Lenders now negotiate to seize control from private-equity owner Thoma Bravo, which stands to lose its entire $5.1 billion 2021 investment, according to sources familiar with the matter.

The defaults signal growing pressure on private-credit funds already facing volatility. These losses come as investors question the sustainability of debt-fueled buyouts and the valuation of technology companies in private markets, with more pain potentially ahead for lenders.