A Review of US vs European Direct Lending
Over the years the US has been by far the dominant supplier of leveraged loans globally. But given similar regulatory pressure being exerted on overseas banks as here, Europe is gaining media attention as a source of debt opportunities for both managers and investors.
How should these opportunities be viewed relative to senior credit in the US? Is there something fundamentally different about the direct lending space in Europe, or is it the same asset dressed in a different currency?
Lenders to European companies face different challenges than those in the US. In general, and as discussed below, banks in Europe have been aggressive about defending their market share, particularly with relationship sponsors.
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