Bain warns: The default rate risk in the software industry may reach double digits
Angelo Rufino, head of Bain Capital's North America Special Situations Group and Europe Special Situations Group, stated that as the disruptive effects of artificial intelligence (AI) spread and loans mature, the default rate in the software industry could surge to "high single digits or low double digits."
Rufino expects that many software service companies will face limitations in their ability to negotiate price increases due to the rise of AI, making debt refinancing more challenging.
Although the storm in the software industry is unlikely to evolve into a broader credit market issue, Rufino believes that the current credit spreads are too tight given the potential risks in the market
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