Article
Clearlake’s Constant Contact $1.35B Refi Faces Lender Pushback Over AI Disruption Fears
By: Geoff Burrows
Reporting: Yuheng Zhan, Geoff Burrows
Clearlake-owned email marketing software company Constant Contact continues to sound out investors for its planned $1.35 billion refinancing via JPMorgan as many lenders hesitate over the sector’s vulnerability to AI disruption, according to sources.
To compensate for perceived risk, some existing lenders are seeking a paydown and higher pricing to extend the debt, while others have also advocated for including a bond component in the refinancing solution to diffuse software exposure among loanholders, sources said.
Initial pricing discussions for the all-first-lien term loan refinancing, which will replace the existing first and second lien debt with a new first lien term loan, centered on SOFR+525 to 550 bps with 98 OID, Octus reported in late June.
Premarketing began on June 22 and market participants expected the syndication process to conclude after the July Fourth holiday before a broader launch, although timing remained fluid, as previously reported.
Constant Contact’s revenue growth increased from 7% year over year in 2025 to 8% in the last 12 months ended the first-quarter 2026, sources said, adding that more than one-third of subscribers now use the company’s AI features. Those users spend approximately 64% more per month on average and have roughly 15% higher retention, according to sources.
Performance at the Waltham, Mass.-based company remains strong, one source said. Lender concerns are predicated on a broader caution toward marketing technology and software companies that may be at the mercy of AI disruption.
Octus’ Private Company Analysis of the Constant Contact financing can be found HERE.
The investors’ pushback on Constant Contact is consistent with a trend of asset managers trimming exposure to software credit amid concerns over the impact of AI. In the private credit space, direct loans backing Thoma Bravo-owned Anaplan and Coupa Software drew secondary trading interest as some lenders sought to reduce their software exposure amid heightened business development company redemption pressure, as reported by Octus in June.
In addition, Thoma Bravo had explored a sale of the healthcare software company Imprivata with JPMorgan and Evercore earlier this year but has since shelved the process. The sponsor instead refinanced the company’s roughly $1.2 billion first lien term loan in June, extending its maturity to December 2029, with the loan price tightening to SOFR+375 bps and 99 OID, Octus reported.
Investors’ pushback on Constant Contact’s refinancing comes as leveraged finance issuance has picked up in recent weeks, with issuers taking advantage of an open primary market dominated by opportunistic refinancings ahead of the post-July Fourth summer slowdown, but investors have yet to come out of wait-and-see mode, Octus reported.
Constant Contact and Clearlake declined to comment. JPMorgan did not return a request for comment.
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