How EU private debt growth is changing leveraged lending

Author: | Published: 6 Aug 2013
  • The growth of the Europe’s private debt market reflects a major structural change in the region’s leveraged lending market;
  • As European private debt funds become more involved in financing EU acquisitions, the use of more borrower-friendly US loans to fund European-focused businesses has also risen;
  • But bankers’ counsel have warned this US push has caused non-standard precedents to creep into New York law credit facilities, in a so-called 'Europeanisation’ of US loan agreements;
  • Lawyers predict European market participants might also seek to introduce US loan terms into the European market.

European private debt funds’ growing involvement in regional leveraged lending has prompted a commensurate rise in the use of US loans to finance EU acquisitions. Market participants warn local law provisions are creeping into New York law agreements as a result, and expect a softening of UK law loan documentation to follow.

Demand for a private debt market...