Moody’s Cuts Outlooks on Blackstone, Golub BDCs Over $194 Billion Software-Loan Risk
Updated
Updated · Forbes · Jun 6
Moody’s Cuts Outlooks on Blackstone, Golub BDCs Over $194 Billion Software-Loan Risk
1 articles · Updated · Forbes · Jun 6
Summary
June 5 brought negative outlooks from Moody’s on Blackstone and Golub’s publicly traded BDCs, with the ratings agency citing their exposure to software loans as AI fears spread from equities into credit.
9% of U.S. broadly syndicated loan issuance has gone to software this year, roughly half 2025’s level, while software loans lost 4.73% through May 31 against a 1.24% gain for the broader loan market.
CLO buyers are retreating as Blackstone trims software in new deals and Guggenheim marketed a roughly $560 million CLO as software-free, even though software still makes up 12.5% of the $1.5 trillion leveraged-loan index.
21% of software loans mature in 2028 versus 14% for the overall index, and 58% of the sector is rated B-minus or lower, leaving weaker borrowers with pricier refinancing, amend-and-extend talks or liability-management restructurings.
Healthcare has overtaken software as the top institutional loan sector at 14% of issuance, underscoring how AI worries are redirecting capital rather than triggering an immediate default wave.
As capital flees software for the first time since 2015, which overlooked sectors are poised to dominate the credit markets?
With AI making old metrics obsolete, how can lenders now tell which software companies will actually survive?
Is the great software sell-off a rational repricing of AI risk or a market panic creating a historic buying opportunity?
Private Credit at a Crossroads: $2 Billion Redemption Deficit, Moody’s Downgrades, and AI-Driven Risks Shake BDC Market in 2026
Overview
In June 2026, Moody's changed its outlook for Blackstone Secured Lending Fund and Golub Capital BDC from stable to negative after a tough first quarter for business development companies. This shift was mainly due to a widespread decline in asset quality, as shown by a $3.5 billion drop in the fair value of the top 12 BDC portfolios. Much of this loss came from net sales and repayments, but broad markdowns also played a role. For Blackstone, the situation was made worse by higher-than-expected non-accrual investments and realized losses, signaling deeper credit quality concerns across the sector.