1、USPrivate Credit MonitorFebruary 2025PG 2MONTHLY US PRIVATE CREDIT MONITOR|PERMISSION TO REPRINT OR DISTRIBUTE ANY CONTENT FROM THIS PRESENTATION REQUIRES THE PRIOR WRITTEN APPROVAL OF PITCHBOOK DATA,INC.Key Takeaways Direct lending deal activity is off to a slow start Early 2025 featured a slow sta

2、rt for dealmaking as M&A interest ebbed in the face of a rapidly shifting regulatory environment.Estimated loan volume declined more drastically than deal count due to fewer large buyouts financed by direct lenders amid an uncertain M&A outlook.Private equity remains a major driver,but issua

3、nce is softer Sponsor-backed deals continue to represent the lions share of direct lending,although new issuance has dipped in early 2025.LBO activity,which rebounded in 2024,has declined,indicating potential market hesitation around political turmoil.Key sectors are driving activity Healthcare and

4、technology remain the dominant industries in direct lending,accounting for a combined 45%of all deals in 2024.Software has been one of the favorite sectors for direct lenders who like the reliable revenue streams of subscription business models with sticky customer relationships.Spreads continue to

5、compress amid fierce competition for deals The cost of borrowing in direct lending continues to decline,with many deals pricing with a spread of around 500 basis points.Increased competition from syndicated loans is further pressuring spreads for larger borrowers,encouraging repricing activity as di

6、rect lenders fight to keep their best performers in their portfolios.Who is winning the tug-of-war?Institutional loans are reclaiming some market share as more large direct lending deals migrate to broadly syndicated markets,where new-issue spreads have tightened to the lowest levels in over a decad