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Throughout the first half of the yr, €6.6bn (£5.56bn) of personal credit score amenities had been refinanced on the European broadly syndicated mortgage market.
In response to a bi-annual survey on European leveraged finance carried out by PitchBook LCD, there are a number of the reason why firms may hunt down extra financing from the personal credit score markets within the second half of the yr.
27 per cent of market contributors mentioned market volatility/execution certainty could be the driving issue behind refinancing; whereas 27 per cent cited the rising market depth; and an additional 27 per cent mentioned that the supply of payment-in-kind debt made personal credit score extra interesting.
Learn extra: European personal debt offers drop as banks claw again market share
One other 18 per cent mentioned flexibility of phrases could be the principle motive why they’d select to refinance utilizing personal credit score.
Elsewhere within the survey, 18 per cent of market contributors pointed to geopolitical volatility as the largest danger to leveraged credit score portfolio efficiency over the following six months. 15 per cent cited credit score high quality dangers because the second-biggest menace.
Learn extra: Ares, Eurazeo and Goldman high European direct lender rankings
In the meantime, one survey respondent mentioned that “new funds, particularly CLOs, are having so as to add some dangerous credit to their portfolios so as to get the economics to work, which might lead to poor efficiency going forwards if these credit score dangers usually are not correctly managed.”
The survey additionally discovered that 46 per cent of respondents consider that personal credit score allocations will improve within the second half of this yr, underlining the continuing recognition of the asset class.
Learn extra: Sponsors and debtors “cautiously optimistic” this yr
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