---
title: "H2 2026 Distressed Outlook: Elevated cost of capital, software debt in focus"
description: Explore the rising opportunities for distressed investors in 2026 as they navigate elevated capital costs and software debt amidst a thriving economy.
image: https://insights.axarcapital.com/hubfs/Untitled%20design%20(20).png
---
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# H2 2026 Distressed Outlook: Elevated cost of capital, software debt in focus
August 3rd, 2026
0 min read
By [Axar Capital Management LP](https://insights.axarcapital.com/author/axar-capital-management-lp)
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We at [Axar Capital](https://www.linkedin.com/company/axar-capital/) are excited to see our CIO [Andrew Axelrod](https://www.linkedin.com/in/andrew-axelrod-87ab661b9/) cited in the informative 2H 2026 Distressed Outlook piece by Jack Hersch at Pitchbook. See below for the link to his full outlook that unpacks the potential of elevated restructurings down the road.
Low default data belies a rising share of loans priced at distressed levels as distressed investors eye the potential for elevated restructurings down the road.
Distressed investors are, by their nature, optimists. They must be, since they see bargains and opportunities where other investors fear to tread. True to form, recent conversations with a number of distressed players reveal a significant distressed opportunity set in the back half of 2026 in the face of a roaring US equity bull market and a vibrant US economy.
#### [Read the full article](https://pitchbook.com/news/articles/h2-2026-distressed-outlook-elevated-cost-of-capital-software-debt-in-focus)
---
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