EMEA Middle Market Industry Update: Private Debt Funds Fill Gap Left By Leveraged Loans

Private debt funds have been buying secondary loans, offering bifurcated debt packages, including PIKs and preferred equity to continue to deploy capital in volatile markets. While in the first half of the year, private debt funds filled in the gap left by leveraged loan and high yield bond investors to support buyouts, investors are now considering secondary market relative value, adapting deal structure and becoming pickier on sectors.

As the M&A pipeline has been hit by an increasing gap in companies valuation due to the prospect of recession and inflation, direct lenders have focused their efforts on tailored opportunities.

If you are interested in reading more coverage of issuances, leveraged financing and recapitalizations across the US, EMEA and Asia from leveraged finance and legal experts, please click through to read the leveraged finance section of the Reorg blog. Our coverage includes news, data and analysis on leveraged loans, the leveraged loan and finance market as a whole, leveraged finance transactions and more. Request a trial.