Published on November 8, 2024 at 9:30 a.m.
Arnaud Lefebvre
Reading time 11 minutes
Although (significantly) more expensive than bank debt, private debt financing is increasingly attracting more companies, including large ones with a solid credit profile. To attract them, the funds rely in particular on their ability to offer flexible and tailor-made structures that banks can hardly offer for prudential reasons.
Private debt players are smiling again. Faced with the surge in interest rates decreed by the European Central Bank (ECB) between mid-2022 and the end of 2023, they had seen business demand plunge – of the order of 32% in value in France, at 13.9 billion euros according to France Invest. But after a first half of 2024 that is still generally gloomy, many report a significant increase in the number of requests and files processed since the summer… and the ECB's initiation of a cycle of lowering its key rates: since on June 12, the monetary institution increased its main refinancing rate from 4.50% to 3.40%. This suggests a rebound in the amounts granted by non-bank financiers in the coming months, and thus prolong the rise of this asset class that began at the end of the great financial crisis of 2008-2009. Protean because it can take the form of unitranche debt, mezzanine debt, senior debt (Euro-PP, etc.) or even quasi-equity financing (PIK, hybrids), private debt weighed 1,620 billion dollars worldwide at the end of 2023 according to Preqin, compared to around 200 billion in 2010. A dynamic from which France is not immune, where France Invest accounts for more than 63 billion euros of business projects financed by this bias between 2019 and 2023.
Beyond the sphere of private equity
Behind this increase in volumes lies another trend, just as…
