Influential debt advisers and lack of an aftermarket are driving differences between Europe’s version of term loan B (TLB) and its US counterpart.

While US TLB is based on the originate-to-distribute model, Europe’s institutional investors are investing for the life-cycle of the loan, meaning they conduct a thorough credit analysis before lending.

It signals the market’s maturation, proving it’s not simply importing terms and structures wholesale from across the Atlantic. It’s also creating a more flexible asset class.

"I don’t think we can safely say that there is a particular term loan B product or particular direct lending product – they are predominantly credit driven and often very bespoke," said Phillip Slater, partner at Morrison & Foerster in London, at a joint LMA and LSTA event in London last week.

While their foundations are the same – high yield bond-style terms – institutional lending...