Deutsche Bank Group Stuck With Software Loans in Rare Hung Deal

Core Viewpoint - A group of banks led by Deutsche Bank AG is facing challenges in selling approximately $1.2 billion of loans related to the acquisition of a software provider, reflecting investor concerns about potential disruptions from artificial intelligence [1] Group 1: Loan Details and Acquisition - Deutsche Bank plans to fund Conga Corp.'s acquisition of PROS Holdings' B2B unit with a $625 million term loan, while a $540 million loan maturing in 2028 will remain outstanding [2] - The debt offering for Conga included a $1.17 billion loan with an interest rate of 4 percentage points above the benchmark rate and a discount between 97.5 cents to 98 cents on the dollar [5] Group 2: Market Sentiment and AI Disruption - There is a lack of interest in the debt due to increasing anxiety over exposure to sectors affected by AI, particularly among software-as-a-service (SaaS) companies like Conga, which provide document automation software [3] - The risk of AI disruption is impacting credit markets globally, leading to declines in shares of business development companies that are heavily invested in software [7] Group 3: Implications of Hung Debt - If banks cannot sell the committed debt before the acquisition closes, they will retain these borrowings on their balance sheets, which could limit their capacity to underwrite future loans [6]