“Well what the hell are we supposed to do with it?” “I dunno. Should’ve thought about that before you got yourself tied up in a software LBO during SaaSpocalypse.”

A consortium led by Deutsche Bank’s stuck with a loan it presumably doesn’t want after a marketing pitch for debt tied to a document automation firm’s acquisition of a PE-backed B2B company failed.

If you’re not chuckling already, congratulations: You have a life outside of capital markets. If you are chuckling, I’m sorry you’re stuck in the bubble, but if it’s any consolation I’m in there with you (I wish I weren’t, but such are the vagaries of circumstance) and this is undeniably funny.

The writing on this particular wall wasn’t hard to read. Around 6:30 AM on Tuesday, three hours before the opening bell sounded on what would end up being a grim session for software stocks, Bloomberg for the first time reported comments made by Apollo bigwig John Zito who, while regaling a crowd in Canada late last year, asked, “Is software dead?”

It wasn’t a new question, but I suppose it was alarming to hear it posed by someone as well-placed as Zito, who knows a thing or two about private credit having worked for over a decade building out Apollo’s footprint in the space.

Fair warnings were everywhere, but banks gotta bank, so to speak. Deutsche did just that, spearheading Conga’s debt-funded takeover of PROS Holdings from software-focused PE Thoma Bravo, which bought the business last year.

Suffice to say this was an inopportune time to market the associated loan. Don Draper himself would’ve had a hard time pitching this under the circumstances. Deutsche and friends are now staring at a dreaded hung deal.

News of Deutsche’s struggles to market the Conga loan is “bang-on” with the “SaaSpocalypse” theme, which is “going viral,” Nomura’s Charlie McElligott said. “The AI trade is perversely ‘eating it own’ inside tech, with the software ‘existential crisis'” narrative “really picking-up velocity.”

The figure above gives you a visual for what credit watchers have dubbed “loan-ageddon.” Eye rolls for another cheap doomsday moniker, I know. But hey, cut ’em some Slack (get it?): These folks didn’t train as creative writers.

A lot of these names are off pretty sharply. Blue Owl, for example, is down 20% already in 2026 and 55% from the record highs seen this time last year. For Ares, those figures are 20% and 32%. For KKR, 20% and 35%. I could go on.

“If the nature of the business you’re in is selling digital goods and services, you’re getting cooked on the Anthropic fears” which are “hitting meaningfully ahead of schedule,” McElligott remarked, adding that the SaaS wipeout’s bleeding into the credit space, where everyone’s suddenly rethinking the nature of the hypothetical worst-case.

Previously, the main AI-related concern was, of course, hyper-scaler issuance and an over-supplied IG market. Now, instead, “it’s the private equity / private credit / BDC universe’s software exposure that’s making folks nervous, especially when considering the absolute bloodshow we’ve already seen in this under-fire ‘asset class’ post-Tricolor/ First Brands,” McElligott went on, referencing last year’s “roach” scare.

And so it was that Anthropic became the new potential catalyst for a realization of private credit tail-risk, one of the market’s perpetual bogeymen.

In the January edition of BofA’s popular monthly fund manager poll, private equity and private credit continued to register as the most likely source of a prospective credit event, as illustrated on the left, below.

The figure on the right reminds you that thanks to Donald Trump’s back-to-back escalations (the operation to capture Nicolas Maduro and the bid to “acquire” Greenland), geopolitical considerations stormed back to the top spot on the tail risk list. Private credit was a distant fifth place. My guess is it’ll jump a few spots in this month’s poll.

Software’s the worst-performing part of the US leveraged loan market in 2026. In a nightmare scenario, default rates across private credit — a $1.7 trillion market, where exposure to AI disruption risk is pervasive — could soar to 13%, UBS reckons.

When Thoma Bravo took PROS Holdings private last year, the press release said the latter was “well positioned” to “advanc[e] AI innovation and agentic intelligence.” In announcing the completion of the (hung) deal to acquire PROS on Monday, Conga boasted of a unique opportunity to create “a differentiated enterprise platform” built around “AI-driven” innovations.

When you go to Conga’s website to read about the deal, you’re greeted by an AI sales development representative. “Hi there! I’m Cori,” it says. “I saw that you’re interested in Conga’s recent acquisition of PROS B2B. I’m available if you have questions!”

Somewhere, Claude chuckled.