The proportion of large- and mid-cap personal debt offers dropped final yr in favour of smaller transactions, as lenders flock to the decrease finish of the marketplace for extra beneficial pricing.
Knowledge compiled by Preqin, shared with Various Credit score Investor, confirmed that the share of mid-cap offers – these between $100m (£77.3m) and $500m – fell to 19 per cent final yr from 25 per cent in 2023.
Massive-cap offers – these of $500m and extra – fell from 41 per cent of the market in 2023 to 36 per cent in 2024.
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Conversely, small-cap offers – beneath $100m – rose from a 34 per cent share of the market in 2023 to 45 per cent in 2024.
Antonello Aquino, managing director for EMEA personal credit score at Moody’s Rankings, mentioned that the shift of personal capital could be motivated by a number of market traits.
“LBO exercise has been depressed during the last two years,” he mentioned. “Consequently, extra direct lending exercise has taken the type of add-on transactions, which are typically smaller in measurement.
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“The prevalence of smaller offers can also be attributed to much less margin compression within the small-cap phase in comparison with the remainder of the market.
“Direct lenders are much less aggressive on pricing on the upper-middle-market offers in comparison with the resurgent broadly syndicated mortgage market and by concentrating on of smaller, considerably riskier companies permits direct lenders to cost greater rates of interest.”
917 personal debt offers had been recorded in 2024, with a median deal measurement of $1,113.1m. This in comparison with 878 offers in 2023, with a median deal measurement of $1,322.7m, in accordance with Preqin information.
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Mixture deal worth fell from $146.8bn in 2023 to $104.6bn in 2024.
This yr, 132 offers have been recorded as of 6 March 2025, with a median deal measurement of $775.7m, totalling $1.6bn.
