Bloomberg Surveillance · Monday, July 27, 2026
While default forecasts in high-yield markets have been raised due to a concerning left tail of borrowers, private credit is being watched closely, particularly the 2028 maturity wall. Although refinancing so far has been encouraging, there's a significant amount of software debt to be refinanced. Separately, nearly $200 billion in data center deal activity has occurred in the private market since early 2025, with private markets expected to provide financing certainty for AI build-outs.
“In the High Old market, we did raise our default forecast last week because we're a little bit concerned about this left tail of borrowers that haven't been contributing to the overall resilience in the credit markets. That coupled with higher AI related issuance in the High Old market, that market's not immune higher commodity costs, higher rates translating into a higher cost of capital leaves us on the margin somewhat concerned.”
“The key point we are watching in private credit and the leverage loan market is the twenty twenty eight maturity wall, because there's a lot of software debt that needs to be refinanced. So far that refinancing has been encouraging. So yeah, and we've already. We've already started chipping away at that. It's been encouraging. But that's the key point we're watching, all.”
“We estimate nearly two hundred billion dollars of data center deal activity in the private market since it start of twenty twenty five. Man I did not know that who's buying this stuff.”