below face value: FS KKR Capital Corp marked its exposure around 79 cents on the dollar, and Apollo Debt Solutions around 74. Blackstone’s private credit chief has blamed execution issues more than artificial intelligence disruption, and Thoma Bravo brought in a new leadership team in early 2025 to steady results.
Why should I care?
For markets: Private credit can end up running the company.
This is what “senior” loans look like when a leveraged buyout (a purchase funded mostly with borrowing) goes sideways. If Medallia is handed to creditors, lenders don’t just take a loss – they may become the new owners, and funds that were sold as steady income can start behaving more like stocks. More cases like this in software could push investors to demand lower debt levels, tougher loan protections, and higher interest rates on future deals.
Zooming out: High rates are stress-testing the buyout model.
Private equity’s playbook relies on using debt, then improving operations fast enough to pay it down. That math was easier when borrowing costs were near zero; it’s much less forgiving now, especially for subscription software where growth has cooled. The bigger shift is that restructurings can redraw ownership quickly – moving control from dealmakers to lenders as soon as performance falls short.
