NORWAY Trends and Developments Contributed by: Ida Marie Windrup, Markus Nilssen and Daniel Jovanovic, BAHR
However, the authors have noted that it has become more frequent to finance acquisitions with Norwegian bonds. It is possible to obtain certain funds for Nor- dic bonds up to a given size, with subscriptions from bond investors based on pre-commitments received (typically at a premium) and/or based on an under- writing against payment of an underwriting fee. The latter will allow the marketing of the bonds and thus the possibility for the issuer to obtain better pricing (if available). Today, the authors observe investors being willing to pre-commit or underwrite sizable amounts (and thereby offering certain funds) making Nordic bonds a viable alternative to ordinary bank acquisi- tion financing. Direct lending in Norway The Nordic markets have established themselves among Europe’s most rapidly expanding sectors for private credit, with Norway playing an increasingly prominent role despite the country’s traditionally stringent lending regulations and conservative bank- ing culture. Norway has experienced a notable direct lending expansion, driven by both domestic demand for alternative financing solutions and international capital seeking attractive risk-adjusted returns in a stable regulatory environment. International sponsors operating in the Norwegian market are well-versed in direct lending structures from their experience in the London and New York markets, and they have been leading the charge from the borrower side, driving demand for flexible financ- ing solutions that can support complex transaction structures and aggressive timing requirements. These sponsors have brought sophisticated approaches to capital structure optimisation and have been instru- mental in educating Norwegian borrowers about the benefits and applications of private credit solutions. The growth trajectory for private credit in Norway appears highly sustainable, and market participants widely believe that private credit will continue to gain significant traction, increasing its market share vis-à- vis Norway’s banking and debt capital sectors. This expansion is enabling innovative refinancing solutions and creating entirely new avenues for funding that were previously unavailable or prohibitively expensive for many borrowers.
This evolution also creates substantial opportunities for traditional banks, which are adapting their busi- ness models to work alongside private credit provid- ers rather than viewing them purely as competitors. Increasingly, market participants are seeing both uni- tranche facilities and other sophisticated structures such as common terms frameworks, where traditional banks can provide senior financing under the same comprehensive “umbrella” of terms and security packages as, for example, bonds subscribed by pri- vate credit funds or other alternative lenders. Additional opportunities where private credit funds actively seek senior debt partners include complex acquisition financings, where the combination of tra- ditional bank expertise and private credit flexibility can create optimal solutions for borrowers. The interplay between private credit and traditional bank lending is also increasingly evident in the context of the refi- nancing pipeline. As private credit portfolio companies mature and their financing needs evolve, they often seek traditional bank refinancing solutions that can provide different terms, pricing, or structural features that better match their evolved business profiles. Securitisation The European Union’s comprehensively reformed securitisation legislation has been implemented in Norway as of 1 August 2025, representing a water- shed moment for the Norwegian capital markets. This implementation is expected to pave the way for both synthetic and traditional securitisation transactions by Norwegian banks, introducing sophisticated risk management and capital optimisation tools that have been successfully utilised in other European jurisdic- tions for many years. Securitisation is widely viewed as a potential signifi- cant growth area in the Norwegian capital market, addressing a particular challenge where Norwegian banks suffer from substantially higher capital require- ments than comparable institutions in other Nordic jurisdictions and throughout the rest of the Europe- an Union. These elevated capital requirements have historically constrained Norwegian banks’ ability to optimise their balance sheets and compete effectively with international peers.
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