US private credit faces potentially higher defaults as software exposure weighs - Reuters

US private credit funds are facing elevated default risk due to significant exposure to software companies, according to Reuters reporting. Private credit has grown substantially as an alternative lending source for middle-market and larger companies over the past decade, with software firms representing a concentrated portion of these portfolios. The concern reflects broader vulnerability in the sector as higher interest rates and economic pressures test borrowers' ability to service debt. Software companies, which often carry high valuations and depend on sustained growth, may struggle more in a tightening environment, potentially triggering cascading defaults across private credit vehicles. This exposure highlights the systemic risk that concentrated sector bets pose to what has become a major funding source for American businesses.