Thoma Bravo Acquires Distressed Software Debt Position
The firm purchased a $225 million software loan at a discount amid growing sector debt concerns.
Updated on Oct. 20, 2026 in Software
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In July 2026, private equity firm Thoma Bravo acquired a $225 million software loan position at 90 cents on the dollar from a non-traded business development company. The firm subsequently allocated $75 million of the debt to its own funds while transferring the remaining $150 million to its limited partners.
Why it matters
Lenders are increasingly shedding their software debt exposure to meet redemption demands and reduce risk amid concerns that artificial intelligence disruption could impact company valuations. This secondary market activity reflects broader market efforts to navigate a significant maturity wall facing the software industry.
Thoma Bravo estimates an unlevered internal rate of return of 13% on the acquisition if held to maturity. This deal is part of a larger landscape where $300 billion in software loans are set to mature by 2030.
The players
Thoma Bravo
Thoma Bravo is a prominent private equity investment firm that focuses heavily on software and technology-enabled business services.
Jeff Levin
Jeff Levin is an executive who provided insight into private credit market dynamics at the Private Credit Connect conference.
The details
Thoma Bravo leverages secondary market opportunities to acquire debt as traditional lenders seek to exit positions. The firm's strategy targets software loans that are being sold off to mitigate sector-specific risks and liquidity constraints.
Timeline
Thoma Bravo purchased the $225 million loan position in July 2026.
Jeff Levin discussed private credit trends on October 19, 2026, in Miami.
A significant volume of software loans is scheduled to come due in 2028.
Approximately $300 billion in software industry debt is set to mature by 2030.
The Tech Race
This acquisition fits into the broader evolution of private credit as investment firms navigate the software loan maturity wall. It highlights a strategic shift as players move to consolidate software debt as legacy lenders reduce their sector footprint.
While this transaction is institutional, it signals how firms are positioning themselves for potential software market volatility. Investors and stakeholders should watch for how these debt restructurings might influence the future growth or stability of various software-based services.
The takeaway
The firm projects a 13% unlevered internal rate of return for this investment, highlighting the potential profits available in distressed software debt. Investors should monitor the secondary market for similar opportunities as the 2030 maturity wall for software loans approaches.
Further reading
For additional context on market trends, visit the Software section.
Source note: This article includes information reported by Pitchbook.
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