Thoma Bravo’s $2.5B refinancing for Sophos faces lender hesitation over AI fears

When your lenders start worrying that artificial intelligence might make your product obsolete before they get paid back, you have a problem. That’s roughly where Sophos finds itself as it tries to refinance approximately $2.6 billion in debt, with private credit firms dragging their feet over concerns about AI’s potential to reshape the cybersecurity landscape.

The cybersecurity company, owned by private equity giant Thoma Bravo since a 2020 acquisition, needs to address a $2.5 billion first-lien term loan maturing in March 2027 and a $92.5 million revolving credit facility due in December 2026.

The numbers behind the hesitation

Moody’s Investor Service downgraded the company from B2 to B3 in March 2026, citing concerns about the looming debt maturities and weakening operational performance. Projected leverage could reach 9x by the end of fiscal year 2026.

Early discussions in the private credit market were reported at roughly S+575, which translates to a spread of 575 basis points over the Secured Overnight Financing Rate, on approximately $500 million in EBITDA. Sophos is also exploring the syndicated loan market for potential amendments to its existing debt agreements.

How Sophos got here

Thoma Bravo took Sophos private in March 2020 at an enterprise value of approximately $3.9 billion. The company completed its acquisition of Secureworks in February 2025, adding further to the debt burden from the original take-private deal. Secureworks, formerly a Dell Technologies subsidiary focused on managed security services, was meant to bolster Sophos’s product offerings and competitive position.

Sophos is trying to refinance during a period when private credit firms are increasingly worried that AI tools could commoditize certain cybersecurity functions. As of mid-April 2026, negotiations remain in the early stages.

What this means for investors and the broader market

The Moody’s downgrade compounds the challenge. A B3 rating limits the universe of institutional investors willing or able to participate in any refinancing, as many fund mandates have minimum credit quality thresholds that B3 falls below.

The March 2027 maturity on the term loan gives Sophos roughly a year to sort this out.

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