Competition between lending channels intensified in 2025, as leveraged finance markets in Europe saw lenders vying for deals and offering borrowers greater flexibility ahead of an anticipated surge in activity in 2026.

After a challenging period of elevated  rates, Europe's leveraged finance markets are poised for growth in 2025, with stabilising costs, rising competition and renewed opportunities for dealmakers.

European leveraged finance in 2023 was saddled with the negative effects of elevated interest rates. But as the market adjusts to the "new normal", rate and price stability offer hope for a brighter 2024.