SPAIN Trends and Developments Contributed by: Antonio Paredes, Carlos Saldaña, Manuel Martínez and Román Mejías, ZADAL
market’s most significant transactions. He holds a degree in Law and Economics from the University of Navarra. He is a member of the Madrid Bar Association.
ZADAL Plaza de la Lealtad, 2 5ª Planta 28014 Madrid Spain Tel: +34 917 373 730 Email: madrid@zadal.es Web: zadal.es/en/
Market Context Private credit in Spain sits alongside bank lending rather than replacing it. For many companies, the bank is still the first conversation, and the direct lender comes later. The change over the last cycle is growth in activity and a rise in the number of lenders, includ - ing funds with different strategies and ticket sizes. The lender base now includes more international plat - forms and more local managers. This increases bilat - eral conversations early in a process and the need to compare execution and flexibility. Borrowers see more options. This growth is linked to gaps in bank appetite and to transactions that do not fit standard credit policies. It is also linked to sponsors and borrowers that want an alternative route when a bank process does not work. For lenders and investors, the result is a market with more origination points and more variation by sector and situation. Deal Selection and the Role of Banks Banks remain the main source of corporate lending in Spain. In routine financings with a standard risk profile, banks keep a share that is hard to displace. Private credit tends to appear when the deal is not routine, or when the bank route produces constraints that the borrower cannot accept.
A common pattern is that a borrower explores bank options, receives a decline or a restrictive proposal, and then turns to private credit. Another pattern is that the borrower wants timing or confidentiality that a bank or a syndicated process cannot deliver. In both cases, private credit is used as a solution to a specific constraint. Reasons Private Credit Gets Mandates Private credit often becomes relevant when the bank says no. The reasons vary, but they usually involve leverage, sector exposure, borrower profile, or internal bank limits. In those cases, a direct lender can under - write risk that a bank will not take. Private credit also becomes relevant when a transac - tion needs structure that a bank template does not provide. This includes draw features, flexibility for acquisitions, or a package that is designed around the asset base and cash flows. For investors, this is where the return profile is shaped, because complex - ity and speed have a price. Areas of Activity Real estate is a main area for private credit activity in Spain. It covers investment assets, development, refi - nancings, and situations where banks manage expo - sure or timing. Real estate is also linked to restructur -
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