Borrowers seek AI protection in private equity debt deals

private equity: Private equity firms acquire companies using a combination of investor capital and debt placed on the acquired company’s balance sheet. The sector is relevant because AI-driven disruption is increasing pressure on leveraged software businesses and making lenders more cautious about refinancing or extending their debt. Credit risk: AI disruption is prompting investors and lenders to reassess the creditworthiness of heavily indebted software companies owned by private equity firms. Debt agreements: Force majeure provisions are traditionally designed for extraordinary events beyond a borrower’s control; AI-related disruption is emerging as a novel issue that borrowers may seek to address contractually. Refinancing pressure: Private equity-backed software companies are using maturity extensions and other lender negotiations as refinancing conditions become more difficult.