The European leveraged mortgage market has closed the third quarter of 2024 with document year-to-date institutional exercise of €157bn (£134bn), in line with PitchBook LCD’s European Credit score Markets Quarterly Wrap.
The entire, which incorporates repricings and extensions, already exceeds 2021’s full 12 months €143bn whole, and represents the best whole on this measure since LCD started monitoring repricings again in 2014.
Repricing quantity additionally soared in direction of the tip of the third quarter, taking repricing quantity for the primary three quarters of 2024 to €59.1bn — the best such degree since 2017.
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New mortgage issuance, excluding repricings and extensions, was €81bn by means of three quarters, making it the busiest interval for loans for the reason that first three quarters of 2021, when mortgage issuance hit €107.2bn.
PitchBook characterised the 12 months as one dominated by refinancings. Refinancing quantity in Europe for the primary three quarters of this 12 months was €39.2bn, beating 2017’s €33.7bn. Furthermore, €42.3bn of loans had been prolonged in 2024.
In the meantime, M&A associated financing has been gaining momentum over the three quarters. PitchBook famous that 40 per cent of recent leveraged mortgage issuance was assigned to M&A within the third quarter. Within the second quarter, 34 per cent of European issuance was pushed by M&A exercise, whereas within the first quarter M&A accounted for simply 21 per cent.
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Nonetheless, the relative slowdown in precise M&A transactions this 12 months has brought about congestion within the non-public credit score market as traders wrestle to exit.
“As M&A hasn’t fairly come again, we’re seeing important add-on/refinancing exercise in our portfolios,” stated Stuart Mathieson, head of Europe and APAC non-public credit score and capital options at Barings.
Whereas one other PitchBook supply commented: “Now we have been saying it’s coming again for some time, however now we expect 2025 is the more than likely ending line.”
PitchBook knowledge exhibits that to date this 12 months almost 70 per cent of direct lending offers had been acquisition-related, down from 76 per cent in 2023.
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