Software BSL secondary prices rebounded after an early-year sell-off. However, the sector remained under pressure overall.

New issuance stayed quiet as managers avoided adding software exposure. Market participants remain uncertain about future spreads and covenant outcomes.

The sector now faces a very different backdrop from prior years. Software loans had previously enjoyed especially favorable market positioning.

Covenant Review data shows software deals were generally documented more loosely than others. But that difference narrowed meaningfully over time.

By late in the period, documentation terms aligned with the broader market. Recent comparisons suggest software loan protections became far less exceptional.