OWL conf call Q&A:

(Q):
“With a software maturity wall potentially coming in 2028–2029, and current lenders possibly in redemption mode instead of refinancing, who steps in to refinance these companies? What are current conversations around that risk, and how are equity investors/private equity sponsors likely to behave?”

(A) (Summarized):
Management said current portfolio credit health remains stable (no major rise in watchlists, non-accruals, or PIK), so this is not yet an immediate credit event. They framed AI/software disruption primarily as an equity problem first, since lenders sit senior with large sponsor equity cushions beneath them. Over the next few years, weaker software names may face refinancing pressure, but most sponsor-backed companies will likely require private equity firms to inject additional capital to preserve value and support refinancing. Some cases may become contentious and transfer to lenders, but management expects many sponsors to work collaboratively given the size of their existing equity stakes. Their approach is already to reduce software exposure, monitor which companies are AI winners vs. losers, and rely on underwriting, documentation, and recoveries to manage the subset of software borrowers that ultimately struggle.

*BRAVO: ‘WE ARE NOT INTERESTED’ IN SENDING MORE CASH TO MEDALLIA