Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTMarina LukatskyFri, June 5, 2026 at 5:43 PM GMT+2 6 min readSoftware’s two-decade run atop the leveraged lending market may be over, at least for now.Just 9% of all loans issued in the US broadly syndicated loan market this year (excluding repricings) have come from software companies, the lowest share since 2013 and roughly half the 2025 level. The pullback is even more striking within the PE-backed universe, where software’s share has collapsed to 9%, from 21% in 2025 and a 24% peak in 2020, when the sector was the undisputed darling of the Covid-era deal boom.“This is a market of haves and have-nots, and software is among the have-nots,” says Engin Okaya, managing director at PGIM Credit. “Right now, you’re either getting really good execution given the amount of dry powder out there, or, if you have a more complicated business, or something that has a characteristic about it that the market doesn’t like, those deals are having a hard time getting done.”The LBO market tells the most compelling story here. Software deals peaked at 34.5% of all LBO-related financing in the US broadly syndicated loan market last year, a testament to PE’s long-held conviction that recurring revenue, high margins, and scalability make software the ideal buyout candidate. With software companies under threat of disintermediation from AI, however, that share has since fallen to 17.5%, a level not seen in a decade.“The amount of capital available to deploy in technology transactions has decreased. At the same time, there hasn’t been a great deal of M&A in the space, and the incremental financing dollar that was available has largely evaporated,” says Milwood Hobbs Jr., deputy CIO of Oaktree’s strategic credit platform. “As a result, we haven’t seen many buyouts. Private equity firms are being selective about where they deploy capital in software, and financing conditions are likely to remain challenged.”Whether this is merely a pause or the beginning of a more structural shift, driven by valuation resets, higher-for-longer rates, or a broadening rotation into sectors like healthcare, remains a major question for the leveraged loan market heading into the second half of 2026.Healthcare claimed the top spot in institutional loan issuance for the first time since 2015, accounting for a record 14% of volume so far in 2026. The sector has long been a fixture near the top of the rankings, but spent much of the past decade overshadowed by software. In absolute terms, Healthcare borrowers raised $25 billion from the broadly syndicated market this year, though the figure is heavily concentrated: two January mega-deals — the $7.25 billion term loan backing the Hologic buyout and the $4.4 billion facility supporting the Ensemble Health Partners dividend recapitalization — accounted for nearly half of that total. However, the pattern holds for deal count as well. Software accounted for just 7.4% of all transactions in the broadly syndicated market this year, excluding repricings, which bring no new money to the market. That’s roughly half the 2025 share and the 10-year average. Healthcare, meanwhile, rose to 8.8%, second only to professional & business services, gaining ground from both its 2025 level and its long-term average.Terms and Privacy PolicyPrivacy & Cookie SettingsMore Info