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Debt transactions with alternative lenders up 6% year on year as European markets open

20 December 2016

Non-bank lenders in Europe have recorded 201 deals this year (to the end of Q3), up 6% on the 190 deals for the same period in 2015, according to Deloitte’s Alternative Lender Deal Tracker. In the third quarter of 2016, there were 20 deals in the UK, and 47 in the rest of Europe.

Fenton Burgin, Head of UK Debt Advisory at Deloitte, comments: “Deal activity is now stronger in mainland Europe than the UK as borrowers there start to recognise the flexibility non-bank lenders can provide. The European debt markets are still flooded with an excess of liquidity, approximately €41bn, which will keep things favourable for borrowers.

“In 2017, we expect some global asset managers to refocus lending capital back to US markets with further interest rate rises anticipated and a stronger economic outlook than some European markets. However, many alternative investors already have funds committed to European strategies. Pressures on banks in Europe to deleverage their balance sheets either through the sale of non-performing portfolios or non-core asset sales should also deliver a boost in activity.”

It is estimated there are around 130 direct lending managers seeking to raise over $50 billion of new capital as at November 2016.

Floris Hovingh, Head of Alternative Lender Coverage at Deloitte, adds: “The discrepancy between the alternative lender markets in the UK and the rest of Europe is striking. Deal volumes were down by 21% vs prior year for the UK, as M&A activity was partly put on hold. However it is more than offset by the rapid growth elsewhere in Europe (up by 29%) as direct lenders continue their march across the continent.”

End

Notes to editors
Deloitte’s Alternative Lender Deal Tracker compiles data and information on a confidential basis from 50 subscribing leading alternative lenders. The tracker covers a total of 862 transactions dating from the fourth quarter of 2012. These are primary mid-market direct lending deals across Europe. On a quarterly basis, full data is provided to all subscribers and a summary report provided to market participants, highlighting key market trends and developments.

About Deloitte
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.

Deloitte LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms.

The information contained in this press release is correct at the time of going to press.

Member of Deloitte Touche Tohmatsu Limited.

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