The most recent direct lending data shows a boost in the deal count and estimated volume in the European market, including the first direct-lending takeout of a broadly syndicated loan since the third quarter of 2025, as well as renewed support for lending to the software sector.
The data is also beginning to indicate some spread widening and a migration of borrowers to the broadly syndicated loan market, with BSL refinancing activity jumping to the second-highest quarterly reading since LCD began tracking this data, according to the latest European Private Credit Monitor
The direct lending deal count rose to 35 in the last three months to the end of July, while the estimated volume increased to €9.8 billion — from 32 and €8.5 billion in the second quarter, respectively. Meanwhile, PE-backed estimated direct lending volume grew to the highest level since the end of 2025 on the three-month measure. However, the estimated volume and count for direct lending deals in the year to end-July still lag the rate tracked in 2025, with these measures trailing by 29% and 19%, respectively.
The trend is the same for sponsor-backed deals, which are running 24% lower for estimated volume and 19% lower by number of transactions. Along with the general recent uptick in activity, interactions between the BSL and DL markets have seen a boost over the past three months, with the direct lending market demonstrating support for software companies despite general market nervousness over this sector. Dutch enterprise software company Unit4, for example, refinanced its syndicated term loan B via a club of direct lenders including Arcmont, according to sources.