Business · Companies · 2 hrs ago
US private equity firms face $300 billion loan maturities in 2028-29
Companies owned by US private equity firms face $300 billion in loans coming due in 2028 and 2029.
The debt is concentrated in businesses bought by investment firms, including many software companies.
Those firms are trying to negotiate longer repayment periods with lenders because high interest rates make new loans costly.
Around $140 billion is due in 2028 and another $160 billion in 2029, according to PitchBook data.
Software firms account for about a third of that debt, and AI competition threatens some software businesses.
If companies cannot extend or refinance their loans, lenders could take control of their assets and private equity investors could lose their investments.
Fund managers are negotiating with creditors now, ahead of the maturities.
US private equity-backed companies face about $300 billion in loan maturities in 2028 and 2029.
About $140 billion is due in 2028 and another $160 billion in 2029, according to PitchBook data.
Fund managers are negotiating with creditors to extend loan deadlines as high interest rates make refinancing costly.
Software companies account for about one-third of the debt and face competition from artificial intelligence firms.
Companies that fail to extend loans may lose assets to creditors, while private equity investors could lose their investments.
- Who
- US private equity firms and the companies they own face the maturities.
- What
- About $300 billion in loans comes due in 2028 and 2029, raising concerns about refinancing and defaults.
- When
- The maturities begin in 2028, with about $140 billion due that year and $160 billion in 2029.
- Where
- United States.
- Why
- High interest rates make refinancing expensive, while AI competition threatens some software companies.
This story does not have two clearly opposing sides.
Low interest rates during the pandemic encouraged private equity firms to make record deals that helped create the coming debt maturities.
The Federal Reserve began raising interest rates, disrupting expectations for profitable company sales and refinancing.
Solera’s planned public offering to pay down debt failed.
About $140 billion in high-risk corporate loans is due.
A further $160 billion in high-risk corporate loans is due.
- Total maturities
- About $300 billion in 2028 and 2029
- 2028 maturities
- $140 billion
- 2029 maturities
- $160 billion
- Software companies
- About one-third of the debt due in 2028 and 2029
- Solera
- $8 billion in debt due in 2028 and 2029
- Risk rating
- About one-quarter of the loans due in 2028 and 2029 are rated CCC+ or lower
2 sources
What people are saying
Companies will have to hand over their keys to the banks and exit the market permanently, with no ability to survive.
The fundamental difference today compared with the past 15 years is the sharp rise in interest rates; previously, there was a favorable environment for refinancing, but today those conditions have disappeared and we do not expect rates to fall soon.