Blackstone Squeezes Thoma Bravo and Its Ailing Software Company

A group of private credit firms led by Blackstone Inc. has refused to extend another lifeline to software company Medallia, amping up pressure on owner Thoma Bravo to inject more equity into the troubled business or hand over the keys via a debt restructuring.

Lenders had previously allowed Medallia to pay a portion of its interest by borrowing more in order to save cash as it worked toward profitability. But in recent quarters they’ve become increasingly convinced that the company’s debt load, which has swelled to nearly $3 billion, is unsustainable, according to people with knowledge of the matter. ...