European Private Credit Becomes Cheaper Than US Loans for First Time

MacroIndustry

โดย Bloomberg·Read original

Summary · why it matters

European private credit loans are now pricing about 4 basis points tighter than US loans, reversing a historical trend where US loans were 22 basis points tighter, according to Houlihan Lokey's Private Credit DataBank. Intense competition for scarce buyout financings in Europe has driven down borrowing costs, while US direct lenders face a $14 billion redemption backlog that has made them hesitant to deploy new capital. A recent €425 million loan for GBA Group priced around 475 basis points over Euribor, compared to a $400 million US tranche for Caris Life Sciences at 500 basis points over SOFR. Large companies able to tap both private credit and syndicated loan markets are benefiting most, with an €880 million term loan for Recipharm tightening to 350 basis points over Euribor. The shift reflects diverging market dynamics, as European lenders compete aggressively for deals while US business development companies limit withdrawals to preserve liquidity.