Market dynamics reshape borrower choices -
Competition between lending channels intensified in 2025, as leveraged finance markets in Europe saw lenders vying for deals and offering borrowers greater flexibility ahead of an anticipated surge in activity in 2026.
In Europe, the traditional boundaries between broadly syndicated loans (BSLs), high yield bonds and private credit have become less distinct. Competition for deals intensified throughout 2025, reshaping the landscape for sponsors and issuers.
Refinancing dominated European lending activity, accounting for the overwhelming majority of issuance. But this was far from a defensive manoeuvre. Instead, issuers used the window strategically—extending maturities, embedding portability features and optimising capital structures in anticipation of the improved exit opportunities that dealmakers expect to emerge in 2026.
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