SPAIN Law and Practice Contributed by: Antonio Paredes, Carlos Saldaña, Manuel Martínez and Román Mejías, ZADAL
ZADAL Plaza de la Lealtad, 2 5ª Planta 28014 Madrid Spain Tel: +34 917 373 730 Email: +34 917 373 730 Web: zadal.es/en/
1. Private Credit Overview 1.1 Private Credit Market Market Performance vs 12 Months Ago
1.2 Interaction With Public Markets Competitiveness of Public Debt Markets
Over the last six months, broadly syndicated loans and high-yield bonds have been competitive in Spain for larger and better-known borrowers with sufficient scale and investor access. In those cases, public mar - kets have often offered attractive all-in pricing and longer tenors, making them a credible alternative to private credit. This has been particularly visible in the upper mid-market and large-cap segments. Continued Role of Private Credit Private credit remains clearly advantaged for Span - ish mid-market transactions and for situations requir - ing speed, confidentiality or bespoke structuring. Even where pricing in public markets is attractive, the execution risk, disclosure requirements and rat - ing process mean that many borrowers and sponsors continue to prioritise certainty of funds. As a result, competition between public and private markets is segmented rather than universal. Refinancing Trends We are seeing a meaningful level of refinancing from private credit into public debt products where borrow - ers can “graduate” to syndicated loans or high yield and lock in improved terms. In practice, this trend is concentrated among larger issuers, while many mid- market borrowers continue to refinance within the pri - vate credit ecosystem due to practical and structural constraints of the public route.
Spain’s private credit market has remained strong and, in many segments, more active than 12 months ago, particularly in the sponsor-backed mid-market. Pri - vate lenders have continued to win mandates where speed, certainty of execution and bespoke structur - ing matter more than marginal pricing. For larger and higher-quality credits, however, banks have been more competitive again, which has pushed private credit toward more complex or tailored situations. Political and Economic Conditions The key driver has been a less restrictive interest rate environment, which has improved transaction feasibil - ity and supported refinancing and acquisition activity. Even so, lenders remain selective and documentation has stayed “downside-focused”, with emphasis on reporting, cash-leakage controls, collateral coverage and intercreditor/enforcement-ready security pack - ages. Political noise has not stopped deal flow, but it has reinforced a preference for robust structures and The most consistent private credit activity has been seen in (i) energy transition and related infrastructure; (ii) sponsor-backed platforms in business services, healthcare and TMT/software; and (iii) real estate and asset-backed situations, often driven by refinancings and transitional business plans. In practice, private credit has been most competitive where the borrower needs flexibility, complexity-friendly underwriting, or certainty of funds. defensible business models. Sectors With Notable Activity
229 CHAMBERS.COM
Powered by FlippingBook