The European leveraged mortgage market has closed the third quarter of 2024 with report year-to-date institutional exercise of €157bn (£134bn), in keeping with PitchBook LCD’s European Credit score Markets Quarterly Wrap.
The entire, which incorporates repricings and extensions, already exceeds 2021’s full yr €143bn whole, and represents the best whole on this measure since LCD started monitoring repricings again in 2014.
Repricing quantity additionally soared in the direction of the top of the third quarter, taking repricing quantity for the primary three quarters of 2024 to €59.1bn — the best such stage since 2017.
Learn extra: Non-public debt funds shut $90.8bn in H1
New mortgage issuance, excluding repricings and extensions, was €81bn via three quarters, making it the busiest interval for loans for the reason that first three quarters of 2021, when mortgage issuance hit €107.2bn.
PitchBook characterised the yr as one dominated by refinancings. Refinancing quantity in Europe for the primary three quarters of this yr was €39.2bn, beating 2017’s €33.7bn. Furthermore, €42.3bn of loans have been prolonged in 2024.
In the meantime, M&A associated financing has been gaining momentum over the three quarters. PitchBook famous that 40 per cent of latest leveraged mortgage issuance was assigned to M&A within the third quarter. Within the second quarter, 34 per cent of European issuance was pushed by M&A exercise, whereas within the first quarter M&A accounted for simply 21 per cent.
Learn extra: Non-public debt good points traction with particular person traders and insurers
Nevertheless, the relative slowdown in precise M&A transactions this yr has precipitated congestion within the personal credit score market as traders wrestle to exit.
“As M&A hasn’t fairly come again, we’re seeing vital add-on/refinancing exercise in our portfolios,” stated Stuart Mathieson, head of Europe and APAC personal credit score and capital options at Barings.
Whereas one other PitchBook supply commented: “We’ve got been saying it’s coming again for some time, however now we predict 2025 is the almost definitely ending line.”
PitchBook information exhibits that thus far this yr almost 70 per cent of direct lending offers have been acquisition-related, down from 76 per cent in 2023.
Learn extra: Non-public debt returned 9.2pc over final 12 months
