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EMEA Deal Origination H1’25 Review

The European sub-investment grade debt markets were bustling in H1 2025, with leverage loan issuance reaching €215 billion, up from €186 billion in 2024, and high yield issuance rising to €91.1 billion from €69.7 billion, according to Octus data. Direct lenders also saw increased activity, closing 434 deals, up from 414 in the previous year. However, most new issuances were deployed into refinancing and add-ons due to a lack of sponsor-led M&A, with just 26% of the 434 direct lending deals reported in Europe being for new LBOs. Despite this, the demand from both banks and private credit firms for any new supply remains extremely strong, leading to increasingly narrow margins.
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