Mid-Market Debt Report Spring 2026 (AlixPartners)

Summary

• H2-25 saw 482 cash-flow loans and 114 ABLs, up 19% and 23% respectively, the highest half-year deal volumes since the publication began.p.3
• Refinancings increased 18% versus H1-25 and 51% versus H2-24, while M&A-related debt issuance in 2025 remained 4% below 2024.p.3
• Direct lending activity rose 27% year-on-year, lifting total deal volume in 2025 to 623, the highest since the publication began.p.6
• TMT's share of direct lending activity dipped from 25% in H1 2025 to 21% in H2 2025 amid concerns over AI-driven disruption in software.p.6
• Banks completed 169 cash-flow deals in H2-25, up from 163 in H1, with 56% of deals funding LBOs or add-on acquisitions.p.7
• Five-year SONIA jumped ~80bps to 4.3%, EURIBOR is up ~50bps to ~2.8%, and SOFR has nudged 15bps higher to 3.6%.p.5

Key insights

1. March 2026 has so far seen no high-yield bond issuance and a sharp fall in leveraged loan volumes.p.2
2. The 24th edition covers ~75 bank and non-bank lenders active in the UK and European mid-market.p.3
3. The highest level of ABL deals since 2021 suggests borrowers are turning to asset-based structures to unlock liquidity and fund working capital.p.3
4. AI-driven concerns reduced deployment into the software space, resulting in a 3 percentage point decline in TMT's share of deal activity.p.3
5. SaaS exposure accounts for only ~15-20% of private credit portfolios, typically supported by 50-70% equity cushions.p.5
6. The Bank of England's Financial Policy Committee voted to lower the appropriate benchmark for tier one capital from 14% to 13%.p.5
7. Direct lending had the lowest full-year share of M&A-related financings at 68%, as borrowers used tight spreads to refinance.p.6
8. Refinancings kept overall bank activity broadly flat, with a 29% share.p.7