Growth predicted for European alternative lending markets

GrowthLineThe alternative lending markets in Europe reported strong growth in 2014, according to Standard & Poor’s ‘Alternative Lending Markets In Europe Are Increasingly Open To Mid-Market Companies’ report, published in January 2015.

“Given these positive market developments, expectations among regulators and politicians are high that alternative lending markets will support additional growth in Europe,” said Standard & Poor’s Credit Analyst Taron Wade, lead author of the report.

The French Euro PP market, for instance, has seen the emergence of unlisted deals, which has ushered in new and more international borrowers. And a number of initiatives from various industry bodies are building out a pan-European private placement market.

Overall in volume terms, private placement markets for European issuers, including the US private placement market and Schuldschein, have remained solid over the past few years, totalling €28 billion in 2014.

In addition, the European direct lending market, where dedicated credit funds lend directly to predominantly sponsor-owned businesses, has grown to €10 billion across 200 deals in 2014, up from €5 billion a few years ago.

The amount of information and credit data on midsize companies who can benefit from this alternative funding is becoming increasingly critical because they generally have higher credit risk, S&P stated.