European private lending at highest since mid2022
Private debt funds extend 189 loans in Q4
Debt deal volumes likely still rising this year, Deloitte exec says

LONDON, Feb 27 Reuters European private lending activity has rebounded to levels last seen in mid2022, new data from Deloitte showed on Tuesday, in a sign investors are piling in to risky corporate debt as they anticipate European Central Bank interest rate cuts this year.

Private debt funds, which mostly lend at high interest rates to indebted companies backed by buyout houses, extended 189 loans in the final quarter of 2023, the accounting group said, the most since the second quarter of 2022, just before the ECB first raised interest rates.

Andrew Cruickshank, a Deloitte director and the study39;s author, said private debt deal volumes were likely still rising this year after credit markets opened up to riskier borrowers, even as the ECB keeps rates at record highs.

From our own work in progress, activity seems to be higher than it was in the final two quarters of last year, said Cruickshank, who advises European companies on private debt deals.

The turnaround in private markets, where the number of deals in Europe slumped in the second quarter of 2023 to the lowest since 2020 according to Deloitte, has echoed a revival in the market for bonds issued by risky companies.

Sales of European junk bonds issued by companies whose debt is rated as speculative rose 51 in January from the same month last…