2025 Year-End Credit Market Update
- Chris Sweet, Managing Director | Head of Capital Advisory
- Scott Thomas, Senior Director, Capital Advisory
- John Stine, Senior Vice President
In their latest report, the Portage Point Capital Advisory team details Q4 and full-year 2025 credit market activity, exploring how activity unfolded relative to early expectations, benchmarking results against recent years and offering key insights into the 2026 outlook.
Key Highlights
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- Primary leveraged loan activity, including repricings, decreased 24.5% from record levels in 2024, but marked the second-busiest year on record
- Opportunistic activity declined year-over-year but repricings, refinancings and dividends continued to dominate
- Institutional leveraged loan dividend recap volume reached $80 billion, representing the third highest annual total on record behind 2024 and 2021
- Technical supply-demand imbalance and borrower-friendly pricing persisted with credit spreads tightening throughout the year
- Private credit market spreads continue to tighten to near-record lows, competing directly with the broadly syndicated market on larger transactions
- As we look to 2026, we expect financing markets will remain supportive as M&A activity continues to increase and opportunistic activity moderates from record highs experienced in recent years
Download the Report
Portage Point is a business advisory and investment banking business focused on providing holistic advisory services and solutions to sponsored and non-sponsored middle market companies. The Capital Advisory team partners with clients to evaluate capital requirements, structure tailored financing solutions and run competitive and efficient financing processes to provide certainty of execution and optimize financing outcomes based on unique client goals and priorities.
The team leverages years of transaction execution experience and deep lender relationships across the credit provider landscape to develop an effective process strategy and craft thoughtful marketing materials which highlight attractive credit attributes of the business while addressing key lender concerns. In the constantly evolving private credit and middle market financing landscape, middle market companies, financial sponsors and management teams require an experienced and trusted advisor to navigate this marketplace and secure the financing required to fund business objectives.
The Portage Point differentiated, cross-functional platform enables the firm to add value for clients across a range of capabilities and solutions prior to, during and after a financing transaction, including financial and operational due diligence, transaction execution services, performance improvement initiatives and value creation and capture initiatives.
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Investing in securities involves risk, including the potential loss of principal. The value of investments can go down as well as up, and investors may not get back the full amount originally invested. Past performance is not indicative of future results. All investments carry some degree of risk, including the potential for loss of principal.
Private credit typically refers to debt investments in privately negotiated loans or debt securities. Private credit offers potential benefits such as higher yields, customization of terms, and a focus on steady income generation, but it comes with drawbacks like illiquidity and higher credit risk due to the nature of borrowers involved.
In contrast, broadly syndicated loans are large loans provided by a group of lenders to a single borrower. Broadly syndicated loans are typically rated and have standardized terms, making them more transparent and easier to benchmark. However, they may offer lower yields and less flexibility in terms compared to private credit.
Investing in debt securities is not suitable for all investors. Economic downturns, changes in interest rates, and complex contractual terms further contribute to the risk profile of investing in debt. It is important to conduct thorough research and consider your risk tolerance before making any investment decisions.
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