FOR PEOPLE WHO WANT TO SEE WHAT BREAKS BEFORE IT BREAKS
Lenders are widening spreads and tightening covenants. Sponsors are pausing issuance. The filter is now credit, not narrative.
THE SETUP
The selloff everyone expected never showed up.
Instead, something quieter happened.
Software loans started trading lower in the secondary market. Not collapsing, but consistently softer.
That softness forced lenders to pause new issuance. Borrowers who planned refinances this quarter are suddenly waiting for better levels.
When spreads widen, lenders ask for more yield. They also ask for more control. Maintenance tests return. Baskets shrink. Legal language tightens.
Sponsors feel it fast. Growth plans shift to balance sheet plans. Product roadmaps give way to churn defense.
Fewer deals are clearing. And when fewer deals clear, the cost of capital creeps into every other corner of private markets.
PMD Lens
Credit markets move before equity stories catch up. Loans care about refinance paths and cash durability. When lenders demand tighter terms, they are not debating AI’s promise. They are asking who can service debt through disruption. A 100 to 150 basis point widening in spreads lifts weighted average cost of capital, compresses projected IRRs, and forces sponsors to increase equity checks or reduce leverage. When refinance assumptions change, valuation math follows.
WHAT MOST PEOPLE WILL MISS
Secondary loan prices set clearing levels for new issuance. When they fall, primary markets stall.
When borrowers delay deals, it signals lenders have leverage, not borrowers.
Covenant language is tightening quietly. That shifts control toward capital providers.
Higher spreads in software do not stay there. They lift hurdle rates across private markets.
Consolidation accelerates when financing narrows because only the strongest balance sheets can refinance.
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SIGNALS IN MOTION
The signals below are not forecasts. They are mechanisms already in motion. Each one reveals the same pattern: duration is being financed before economics are fully proven.
Signal 1: AI Land Rush Runs Into Real-World Friction
Drive past a new data center and you’ll see cranes, concrete, and fences.
Power lines. Substation slots. Permits signed by people who answer to voters.
Loudoun County made it easy for hyperscalers to build. That playbook turned farmland into server farms. Now neighbors push back. Grid operators warn about supply strain. Projects that once cleared in months now stretch into years.
Land held without secured power becomes a carry cost rather than a strategic asset. Extended interconnection timelines raise development risk and push required returns higher.
Capital is available and land exists. Demand is clear.
The delay sits between approval and electricity. And that delay is widening.
Investor Signal
The illusion that AI expansion is limited by capital just cracked. Grid access and permitting friction now shape build timelines. Developers with secured power move; others sit in queue.
Signal 2: Housing Freeze Is Squeezing Margins Quietly
Walk through a home improvement aisle. You’ll notice plenty of replacements, but fewer upgrades.
Homeowners are not moving. Mortgage rates keep them anchored. When appliances break, buyers choose basic models. When floors wear out, they patch instead of redesign. That shift drains high-margin mix without collapsing volume.
This does not look dramatic. It just slowly resets expectations.
Lower premium mix compresses EBITDA, which reduces debt capacity even if unit sales hold.
Investor Signal
The risk hiding in plain sight sits inside product mix, not demand. Stable unit sales mask thinner margins. Earnings power now depends on how long turnover stays stalled.
FROM OUR PARTNERS
The Market Is Bleeding — But This Altcoin Is Thriving
Crypto prices are sliding. Fear is everywhere. Retail is selling first and asking questions later.
But beneath the surface, one altcoin is doing the opposite.
While the market bleeds, usage on this project is accelerating. Billions are flowing through its protocol because it solves a real problem, especially when volatility spikes.
Whales have noticed. They’re accumulating quietly while sentiment collapses.
This altcoin is still priced like the market hasn’t caught on.
© 2026 Boardwalk Flock LLC. All Rights Reserved. 2382 Camino Vida Roble, Suite I Carlsbad, CA 92011, United States. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Readers acknowledge that the authors are not engaging in the rendering of legal, financial, medical, or professional advice. The reader agrees that under no circumstances Boardwalk Flock, LLC is responsible for any losses, direct or indirect, which are incurred as a result of the use of the information contained within this, including, but not limited to, errors, omissions, or inaccuracies. Results may not be typical and may vary from person to person. Making money trading digital currencies takes time and hard work. There are inherent risks involved with investing, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk.
Signal 3: Hemp’s Countdown Is Tightening Cash Cycles
The shelves are still stocked.
But buyers are getting cautious.
A federal deadline is hanging over hemp-derived THC drinks. Retailers do not want stranded inventory. Distributors do not want unpaid invoices. Lenders do not want exposure tied to a policy cliff.
Orders slow before the ban date. Cash tightens before revenue drops. Companies feel pressure months ahead of enforcement.
Consumer demand remains. Financing and channel tolerance are tightening.
Investor Signal
Behavior is changing beneath the surface before sales reflect it. Channel partners are shortening exposure ahead of regulation. Liquidity, not popularity, now decides who survives the countdown.
DEEP DIVE
Software Credit Feels The AI Audit First
The stock chart grabs headlines. The loan screen tells the truth.
Not because revenue vanished overnight. Because lenders started asking a different question. How durable is that cash flow if AI rewrites the product stack?
That question changes tone fast.
Secondary loan prices slipped in late January. Banks noticed. Investors demanded more yield. Deals in the pipeline stalled. Sponsors who expected routine refinancings are waiting for levels to recover.
A 150 basis point widening in loan spreads does more than change pricing. It lifts weighted average cost of capital, compresses projected IRRs, and forces sponsors to increase equity checks or reduce entry multiples. When leverage declines, consolidation slows unless balance sheets are exceptionally strong. That is how a narrative becomes a structural shift.
But when there are zero new leveraged loan deals for software, that is not coincidence. It is a reset in clearing levels.
Loans sit closer to risk than bonds. Tech makes up a large share of that market. Many borrowers carry B-minus ratings or lower. That is where scrutiny shows up first.
Equity debates multiples. Credit prices refinance probability.
When lenders tighten covenants and widen spreads, strategy shifts. Growth plans slow. Add-ons wait. Refinancings get pushed out.
If pricing does not improve, delayed refinancings compress flexibility and increase default risk into 2026 and 2027 maturity walls.
Investor Signal
The belief that software cash flows are automatically refinanceable just broke. AI uncertainty is pushing lenders to reprice risk before defaults appear. When the loan market hesitates, capital access becomes conditional, not assumed, and timelines quietly shorten.
FROM OUR PARTNERS
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A former hedge fund manager has identified the companies best positioned to profit.
THE PLAYBOOK
Start by looking at maturity walls, not sector labels. A software name with debt due in 2027 carries a different risk profile than one with no near-term refinancing needs. Wider spreads reduce viable leverage levels and increase interest expense, narrowing covenant headroom even before earnings change.
Balance sheets now matter more than growth slides. Sponsors who assumed easy refinancings are recalculating timelines. Add-ons become harder when new debt costs more. Equity checks get larger. Holding periods stretch.
Capital is no longer evenly distributed. Strong free cash flow buys time. Weak liquidity invites pressure. In this phase, the gap between “funded” and “almost funded” widens quickly.
THE PMD REPOSITION
This is not a blowup. It is a filter.
Software debt is being repriced through spreads and covenants. Data centers are being slowed by power access. Housing-linked margins are thinning through mix. Regulation is tightening working capital before revenue drops.
Capital is still available. It now clears only for durability, liquidity, and timing clarity. In this phase, access determines pace and consolidation.
