<\/p>\n
Syndicated debt markets in Europe have seen \u201cmeaningful growth\u201d so far this year, despite short-term volatility triggered by geopolitical uncertainty, according to Baird.<\/p>\n
Primary issuance year-to-date in syndicated debts markets is up 34 per cent versus the same period in 2024, even though no new issuance hit the market in the three weeks following US President Donald Trump\u2019s \u201cliberation day\u201d tariff announcements.<\/p>\n
However, since that hiatus, single B credit spreads and secondary pricing have nearly returned to pre-April levels, underscoring short-term volatility in syndicated markets, according to Andrew Lynn, managing director in Baird\u2019s private capital markets group and head of debt advisory in Europe.<\/p>\n
\u201cPrivate direct lenders have once again capitalised on this volatility, stepping in where syndicated markets paused,\u201d he said, citing as an example KKR\u2019s acquisition of Karo Healthcare.<\/p>\n
He said that even though some funds have been able to \u201clook through the headlines\u201d and commit to transactions when the syndicated market was challenging, \u201cthere is naturally a greater scrutiny of borrowers directly impacted by known or potential tariffs and lenders are also mindful of the impact on borrowers\u2019 clients and their ability to navigate or absorb changes\u201d.<\/p>\n
Lynn also pointed to extended hold periods as one of the key themes he is watching as European debt markets navigate the uncertainty of 2025.<\/p>\n
Macroeconomic pressures and geopolitical risks are behind the lengthening hold periods in private equity portfolios, with the median in Europe having increased from approximately five years in 2021, to six years in 2024.<\/p>\n
\u201cClearly, this also has a direct impact on direct lenders\u2019 portfolio hold periods; whereas typical loan hold periods used to be three years or less, funds are now assuming a further 12 or 24 months on average,\u201d Lynn said.<\/p>\n
While loan maturity outcomes depend on borrower performance, Lynn noted that \u201cfund-specific constraints also play a role\u201d, such as funds being outside their investment period, and that sponsors, in turn, may hesitate to extend hold periods due to carried interest considerations and fund structuring limits.<\/p>\n
Trying to refinance deals from an old fund using capital from a new fund could require a change of ownership or a switch into a continuation vehicle, \u201cotherwise it\u2019s likely that a third-party refinancing is needed\u201d, he said.<\/p>\n
\u201cLike banks, direct lenders are cautious about refinancing incumbent lenders out of credits, particularly given the efforts usually made to maintain portfolio credits. Therefore, the bar is higher and may call for new layers of capital or indeed alternative capital to provide a solution,\u201d Lynn added.<\/p>\n
<\/p>","protected":false},"excerpt":{"rendered":"
Syndicated debt markets in Europe have seen \u201cmeaningful growth\u201d so far this year, despite short-term volatility triggered by geopolitical uncertainty, according to Baird. Primary issuance year-to-date in syndicated debts markets is up 34 per cent versus the same period in 2024, even though no new issuance hit the market in the three weeks following US […]<\/p>\n","protected":false},"author":1,"featured_media":4345,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4344","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bez-rubriki"],"featured_image_src":{"landsacpe":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/06\/Deft-financing-6-900x445.jpg",900,445,true],"list":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/06\/Deft-financing-6-463x348.jpg",463,348,true],"medium":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/06\/Deft-financing-6-300x200.jpg",300,200,true],"full":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/06\/Deft-financing-6.jpg",900,600,false]},"_links":{"self":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/4344","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/comments?post=4344"}],"version-history":[{"count":1,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/4344\/revisions"}],"predecessor-version":[{"id":4346,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/4344\/revisions\/4346"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media\/4345"}],"wp:attachment":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media?parent=4344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/categories?post=4344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/tags?post=4344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}