Private Equity-Backed Companies Face $300 Billion Debt Wall as Refinancing Costs Rise

Private equity-backed companies face a roughly $300 billion wall of risky corporate debt. About $140 billion in loans matures in 2028. Another $160 billion comes due in 2029.

Much of this debt was taken on when interest rates were low. Higher borrowing costs now make refinancing more difficult and raise the risk of defaults.

Software companies account for about a third of the maturing debt. Lenders have grown cautious about the sector, once a buyout favorite, amid concerns that artificial intelligence could disrupt the recurring-revenue models that attracted investors. New loan issuance to software companies has fallen sharply, making it harder for existing borrowers to refinance.