Clearwater surveyed 125 lenders across Europe and the UK to determine what recent macroeconomic, political, and competitive changes in the market mean for borrowers.
The lenders surveyed were spread across banks and debt funds, covering a wide range of ticket sizes and regions, providing a comprehensive view of the European leveraged finance market.
Over the past year, the European leveraged finance market has experienced favourable shifts amid a more stable economic environment, decreasing inflationary pressures, and gradually declining base rates. Competition amongst lenders has also increased, which has only been heightened by the closure of some of the largest direct lending fundraises in history. The resurgence of the broader syndicated loan market has further prompted banks and credit funds to reduce their spreads to remain competitive. The convergence of these factors has compounded optimism and bolstered confidence in the market for the year to come.
Key highlights
66%
of participants reported debt funds, including new entrants, were the primary source of competitive tension in the market.
80%
of debt funds raised new funds in the last 12 months.
54%
of participants reported a reduction of at least 25bps in margins, with 30% observing a reduction of at least 50bps in margins in the last 12 months.
42%
of debt funds indicated a reduction of at least 25bps in arrangement fees in the last 12 months.
“In 2024, we expanded our debt advisory presence, with new specialist teams now operating in Sweden, Denmark, Finland, and Ireland. Over the last 12 months, we have successfully completed 68 debt advisory transactions across Europe. As we move into 2025, the deal pipeline remains robust, driven by a strengthening M&A market, increasing demand for funding, and improving credit appetite from lenders.”
Simon Chambers, Partner and Head of Debt Advisory UK
Transactions
Not just numbers on a balance sheet, our transactions represent over 20 years’ commitment to our clients’ future. Helping them change the game. Even before it was ready to be changed.
A new international partner to support the growth of the European leader in lighting, energy, and safety solutions for construction sites and infrastructure
Adviser to Platinum Equity on its acquisition of a majority stake in Trime from 21 Invest
Supporting a strategic acquisition in customer experience technology
Adviser to Palatine-backed FourNet on its refinancing to support its acquisition of SVL Business Solutions
Investment to expand access to SME funding solutions
Adviser to Freshstream Investment Partners LLP on raising finance to support their investment in Portman Finance Group
Refinancing of the leading independent European aviation line MRO provider
Adviser to Chequers Capital and management on its refinancing following its investment in Nayak
Clearwater’s European Debt Advisory team has over 35 experienced professionals completing over 68 transactions this year. These transactions range across primary debt raises, acquisition finance, refinances, amendments and restructurings for a wide range of borrowers, providing accurate and up-to-the-minute market intelligence.
Debt Advisory Lead
Simon Chambers
Managing Director
Our European Debt Advisory team
Manuela Scheibe
Partner and Nordic Head of Debt Advisory +46 76 722 51 00 manuela.scheibe@clearwatercf.com Connect
