SPAIN Trends and Developments Contributed by: Antonio Paredes, Carlos Saldaña, Manuel Martínez and Román Mejías, ZADAL
Borrower Preferences Many borrowers prefer bank financing when it is avail - able on acceptable terms. Banks provide products that companies use in daily operations, and bank pro - cesses are familiar to finance teams. For that reason, private credit is often used when bank terms are not available or do not fit the transaction. That said, private credit is now part of the menu in Spain. Sponsors and borrowers consider it in parallel, particularly in deals with complexity, time constraints, or a restructuring element. This has increased the number of financing routes and has expanded the set of lenders active in Spain. Outlook Private credit in Spain is expected to keep growing because it fills gaps left by bank credit policies. Real estate is likely to remain a key area, including refi - nancings and restructurings. Energy transition is likely to continue to generate both development financings and stressed situations. The restructuring plan framework will remain a fea - ture of the market. Lenders will continue to draft with class mechanics, shareholder outcomes, and cross- border perimeter issues in mind. For investors, Spain offers a market where origination exists, but outcomes depend on structure, documentation, and process.
A feature of the regime is that, in the right conditions, a plan can impose measures on shareholders. This changes negotiation dynamics in sponsor situations and in groups with holding structures. It also links pri - vate credit strategy to equity outcomes, not only to creditor outcomes. The regime includes cross-border rules for groups. Where Spanish courts have jurisdiction over a par - ent in a group, they can extend jurisdiction in rela - tion to certain foreign subsidiaries when statutory requirements are met, including a need to support negotiation or implementation and a limit to shared contractual creditors. This can make Spain an anchor jurisdiction for group restructurings in some scenar - ios, and it can influence where a group chooses to place its restructuring perimeter. Execution Factors Execution in Spain depends on early work on struc - ture, collateral, and process steps. Managers that deploy capital in Spain need an approach to local for - malities and to documentation that fits the group map. They also need a plan for communication, waivers, consents, and any post-closing steps that are built into the transaction. Speed is important, but so too is the ability to keep the transaction moving when issues arise, such as collat - eral gaps, corporate approvals, or tax documentation. Many financings also require co-ordination with relat - ed workstreams such as acquisitions, asset transfers, or corporate reorganisations. Investors review how the manager runs these points. Technology can support parts of the process, such as data rooms, reporting, and workflow. In complex financings, judgement and negotiation still drive out - comes, because terms and structure need to fit the facts. For that reason, execution capacity remains a due diligence point for lenders and for investors.
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