Competition between broadly syndicated loans (BSL) and private credit has intensified as debt supply outstrips demand and both compete to win business from sponsors, a new report has found.
The private credit and BSL markets are “replete with capital” and M&A volumes are patchy, meaning options for deployment have been limited, according to the report by law firm White & Case.
“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,” it said.\
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“In the private credit space, direct lending fundraising climbed to €58bn (£50.4bn) in the first nine months of 2025, exceeding the €42bn total raised in 2024. European private credit assets under management now sit at approximately US$500bn (£369bn).
“Capital flows into European BSL markets have been equally robust, recording €56.8bn of new European CLO issuance in 2025, up 16.5 per cent on the €48.8bn total logged in 2024.
“With these markets replete with capital and M&A volumes still patchy, options for deployment have been limited. In turn, competition between BSL markets and private credit has intensified, not only for new deal financing opportunities, but also in refinancing and repricing situations.
“These dynamics drove convergence between BSLs, high yield bonds and private credit throughout 2025.
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White & Case said that the “convergence of private credit and BSL lending” has enabled buyout firms to “make full use of the increasing optionality available through both lending channels and structure creative financing packages to amplify returns and unlock liquidity”.
“With BSL and private credit increasingly seen as interchangeable, sponsors have been able to switch between the two and select the options best suited to specific deals.”
“The interplay between syndicated loans, high yield bonds and private credit will remain a key feature of deal financing in 2026, as all segments of the market compete to work with sponsors,” added Gareth Eagles, co-head of White & Case’s global private capital industry group.
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