Updated

Updated · carlsquare.com · Aug 10

European Leveraged Loan Issuance Rebounds to EUR 32.5 Billion in Q2 as Spreads Hit 330 bps

Updated

Updated · carlsquare.com · Aug 10

European Leveraged Loan Issuance Rebounds to EUR 32.5 Billion in Q2 as Spreads Hit 330 bps

1 articles · Updated · carlsquare.com · Aug 10

EUR 32.5 billion of European leveraged loans were issued in Q2 2026, topping EUR 31.2 billion a year earlier after activity accelerated sharply in May and June.
EUR 18.2 billion of that supply came from refinancing, up from EUR 10.2 billion in Q1, as borrower-friendly conditions, heavy repricing activity and strong investor demand pulled issuance back.
330 bps average TLB spreads marked the lowest level since Q1 2008, while euro single-B spreads tightened to 335 bps; all-in yields still rose to 5.81% from 5.64% as rates fed through.
EUR 6.7 billion of direct lending across 30 deals lifted H1 volume to EUR 15.2 billion, still well below EUR 23.5 billion across 87 transactions in the first half of 2025.
A 25 bps ECB rate hike to a 2.25% deposit rate and lingering geopolitical uncertainty are keeping inflation expectations elevated, even as markets increasingly expect broadly stable rates ahead.

Sources

Can Europe's refinancing boom outpace the ECB's rate hikes before maturity walls crush vulnerable mid-market borrowers?

With European loan spreads hitting 2008 lows, are investors blinding themselves to the looming wave of B-rated corporate defaults?

As traditional banks retreat, will the explosion of AI-driven working capital finance save European businesses or trigger a hidden debt crisis?

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