Blackstone is leading a group of private credit lenders, including Apollo and KKR, in restructuring discussions for Medallia, a software company taken private by Thoma Bravo in a $6.4bn deal in 2021. The lenders have ceased extending payment-in-kind flexibility, shifting Medallia to full cash interest payments. This change will increase the company's annual debt servicing costs by approximately $100m to nearly $300m.

Medallia now carries close to $3bn in debt, servicing costs exceeding its roughly $200m in annual earnings. Blackstone, holding the largest loan at around $1.5bn, is driving these negotiations, highlighting its central role in managing complex credit situations. Lenders are evaluating outcomes including a debt-for-equity swap or a fresh equity injection from Thoma Bravo.