Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, April 27. In today's briefing, a look at how the supposed Saas-pocalypse is playing out in leveraged-loan pricing and a couple of notable defaults continued the parade of bad optics for private credit. Elsewhere, budget airlines are trying to piggyback on Spirit's possible bailout to seek federal aid packages of their own.

Wall Street is sorting software companies into winners and losers. The threat that artificial intelligence tools will fuel a software apocalypse has rattled stocks, triggered record withdrawals from private-debt funds and stirred fears of a new type of credit crisis. But credit markets are sending a more mixed message: Not all software companies are equally endangered.

• The threat posed by AI is still somewhat “vague in everyone’s mind,” said Joe Lynch, head of noninvestment grade credit at Neuberger Berman. There’s uncertainty “over what AI can actually do and what it means for a lot of different businesses.”

Budget airlines pitch Trump administration on $2.5 billion relief plan. A group of budget airlines including Frontier and Avelo is seeking $2.5 billion in government assistance in exchange for warrants that could convert into equity stakes in the companies, according to people familiar with the matter. The request comes as the administration is separately considering extending a lifeline to Spirit Airlines to help it avoid liquidation. 

America’s pandemic car bubble is now trapping buyers in debt. More Americans turning in their cars to buy new ones are encountering a difficult reality: Their vehicles aren’t worth what they owe. And while it isn't unusual for Americans to have negative equity, the average amount they are underwater has skyrocketed.

Share your tips, suggestions and feedback with the WSJ Pro Bankruptcy team: Alexander Gladstone; Jodi Xu Klein; Akiko Matsuda; Alicia McElhaney; Andrew Scurria; Becky Yerak. 

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