Data from this report was featured in Expansión 23 October 2023 >

European Debt Outlook

Q2 2023 Overview

  • European liquid markets experienced a slow second quarter leaving H1 loan volumes at €19.9 bn, approximately €8 BN short of the level recorded for the same period in a disrupted 2022 [I]
  • Low issuance levels were still dominated by extension-led supply, but record extension activity in 2023 so far has also reduced most near-term maturity pressures, while the average time extended also increased (3.3 years in 2023 vs. 2.8 years in 2022) [II]
  • In the European mid-market, we observed a similar trend with deal volumes dropping for the fourth quarter in a row, with 160 issuances in Q2 2023 - 5% lower than Q1 (169 issuances) and 33% lower than Q2 in 2022 (238 issuances) [III]
  • Against a backdrop of a challenging economy and rising base rates across Europe, we are seeing more demand for HoldCo payment-in-kind instruments with sponsors increasingly willing to accept higher priced instruments to avoid pressure on cash flows

2023 Outlook

  • The continuing economic uncertainty in 2023 has resulted in reduced M&A activity, as a result M&A-linked volumes are now at their lowest level since 2012.[IV] Whilst market tone is improving, we expect activity in the near term to remain subdued and skewed towards A&E transactions (Amend and Extend), upsizes and refinancings
  • Nevertheless, we still expect deal activity to pick-up into the final quarter, with an increase in M&A volume as GPs seek to monetize investments on the one hand, and credit investor appetite to deploy fund dry powder 
  • We expect the financial landscape will continue to be impacted by challenging credit conditions in the coming months, even with an anticipated softening in monetary policy tightening by the European Central Bank (ECB) for the cost of borrowing compared to previous quarters[V]
  • However, the scale of improvement in overall market activity remains dependent on potential additional central bank activity to fight core inflation


Debt MM Q2 bar chart

Debt MM Q2 pie charts

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[I] LCD Q2 2023 European Quarterly Wrap 

[II] LCD Q2 2023 European Quarterly Wrap 

[III] *Unless otherwise indicated, all tables, data and statistics provided in this piece, including with respect to deal activity, have been collected via the August 2023 DC Advisory Lender Survey, subject to the limitations of described below.
The August 2023 DC Advisory Lender Survey: (DC Advisory’s independent survey of 98 European banks and direct lenders. which was completed in August 2023 and conducted across UK, France, Germany, Austria, Switzerland, Spain, Belgium, Netherlands and Luxembourg (referred to herein as the “The August 2023 DC Advisory Lender Survey” or the “Survey”). Any such data, including league table data referenced herein is limited to the data provided by the Survey participants and is not meant to constitute definitive market data. The banks and lenders selected for the Survey are based on those that are most active in the market, and that DC Advisory interacts with the most. Accordingly, the Survey participants do not constitute an exhaustive list of banks and lenders who may have been active during the period addressed by the Survey. Comparisons to deal activity or other statistics from prior quarters or other periods are calculated by comparting the results of the Survey to the results from DC Advisory Lender Survey corresponding to the prior period, subject to the same limitations described above.)

[IV] LCD Q2 2023 European Quarterly Wrap