Software firms delay debt raises amid rising costs and AI-related uncertainty, spurring investor concern.

U.S. Due to tighter lender terms and increased borrowing costs, software companies are postponing debt increases out of concern that AI will upend their business models. Higher yields, steeper discounts, and stricter covenants are the results of lenders pricing in increased default risks, particularly for leveraged loans. Businesses are avoiding taking on new debt despite low near-term maturities, as evidenced by the postponement of a number of transactions, including Qualtrics' acquisition financing. Investor sentiment is still low, and software stocks are down 20% in 2026. Analysts caution that over the next two years, defaults may increase more than anticipated, especially in the United States. marketplace.