Distress in the U.S. leveraged-loan market has more than doubled over the past year, with $131 billion in loans now trading below 80 cents on the dollar, according to Axios today. More than half of that distressed debt comes due within three years, forcing borrowers to refinance in a much less forgiving market. Software is a particular trouble spot: AI threatens some companies’ business models, and 84% of stressed software companies are backed by private equity. Earlier this month, JPMorgan strategists also flagged a sharp increase in distressed loans, with technology the biggest troubled sector. The risk is a double hit: companies face pressure from AI competition while higher rates make their debt harder to carry.
https://www.axios.com/2026/10/29/software-leveraged-loans-distressed
October 6, JPMorgan’s distressed-loan figures: https://finance.yahoo.com/news/deeply-distressed-us-loans-rise-181049683.html
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