Software companies are delaying debt deals due to higher borrowing costs and AI disruption fears. U.S. and global firms have paused fundraising efforts, with Blue Owl selling assets to return money to investors. UBS predicts a rise in defaults, especially for leveraged loans to tech companies.

Qualtrics to raise $5.3 billion for Press Ganey acquisition. AI disruption affects leveraged loans more than high-yield bonds. Tech industry borrowers, mostly software, account for the largest portion of leveraged loans. Only 0.5% of software sector loans are due this year.

Stocks have been affected by AI, with software index down 20% this year. Companies facing higher borrowing costs and investor skepticism. Future deals may include stricter covenants for investors. Several planned tech sector deals have been postponed since January.

Lower-rated companies may face greater refinancing and default risk in 2026. Software and business services sectors may not see much issuance in the next year due to rapid technological changes. No leveraged loan deals currently available for software companies.

Read more at Yahoo Finance: Software companies face higher borrowing costs, tougher scrutiny as AI threatens businesses