Fears of AI-driven disruption rippled through the software sector in early February and have continued unabated, creating volatility in the public credit markets. Despite this turbulence, the new-issue direct lending (ex-software) market has remained resilient as the supply-demand imbalance for high-quality assets continues to keep markets competitive and terms aggressive for top-tier borrowers. This has created a divided market where lenders are applying greater scrutiny to software investments. Opportunistic lenders are now competing for "AI-safe" businesses, treating them as top-tier opportunities. Conversely, financing for companies with business models vulnerable to AI has largely stalled, indicating the market is in a period of price discovery as lenders now require an incremental risk premium that has yet to clear the market. Leaning on our firm’s extensive private credit valuation work, we present an update on the health of the private credit market with a particular focus on software loans as well as a framework for assessing the impact of AI disruptions on software valuations.

Please join us to discuss the following:

• Latest new issuance metrics
• Fair value/historical pricing trends
• Performance and credit metrics
• Deep dive into software loans
• Framework for assessing software enterprise values

 AIMA Host:

• Michael Bugel, Managing Director, Co-Head of APAC, AIMA

 Speakers:

• Dr. Cindy Ma, Managing Director, Global Head of Portfolio Valuation and Fund Advisory Services, Houlihan Lokey
• Zi H. Cheng, Director, Houlihan Lokey

This session is opened to managers and allocators only.

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