NETHERLANDS Trends and Developments Contributed by: Gianluca Kreuze, Ruben den Hollander, Anne van Geen and Sanne van Esterik, Loyens & Loeff
group restructuring – is also expected. This is because, since the EU Restructuring Directive only provides for a minimum level of regulation, every country has its own restructuring proce- dure. Throughout the years, valuable tools have emerged in Europe that allow restructurings to take place without the consent of all creditors, including the “cross-class cram-down” under the UK restructuring plan and the Dutch WHOA scheme of arrangement. Unlike the US, Europe has not seen many liabil- ity management transactions, and might only have used them as a solution to liquidity issues. That said, there is some interest in these types of transactions within the EU market. In the US, participant lenders are opening up baskets to increase liquidity without the involvement of non-participant lenders. We do see more use of basket capacity to increase liquidity, and often this does not require majority votes. Market Participants The Dutch acquisition finance market is tradi- tionally divided into three segments based on debt size. • Small – up to EUR30 million, often lent by traditional Dutch commercial banks on a bilateral basis, though increasingly by direct lenders as well. • Medium – ranging from approximately EUR30 million to EUR250 million, commonly lent by direct lenders or consortia of Dutch commer- cial banks. • Large – exceeding EUR250 million, usually lent by larger syndicates comprising both Dutch and non-Dutch commercial banks or direct lenders. As a result of continued unpredictability around pricing, more borrowers and issuers have turned
to direct lending options. The private credit mar- ket has grown explosively over the years (21% over the past decade), gaining the most traction, in particular, in the (sponsored) middle-market. As of early 2024, European private lending to reached approximately USD500 billion in assets under management, representing almost 30% of the USD1.7 trillion global private credit market, based on Preqin data. As direct lenders are increasing market share, they are also exploring new market areas. Direct lenders are increasingly investing into financing working capital, providing (stretched) senior solutions, favouring financing models based on recurring revenue over EBITDA, and support- ing smaller private equity transactions. Con- sequently, traditional bank-led financing is no longer the primary source for funding private equity endeavours in the Netherlands. Instead, direct lenders are also expanding their reach into the corporate financing arena. At the same time, commercial banks are trying to regain market share by mirroring the offering of direct lenders at lower rates. Trends and Developments NAV facilities Borrowers and lenders alike are seeking new opportunities in the face of current challenges in the (leveraged) loan market. As investment funds are experiencing more difficulties secur- ing financing portfolio companies on favour- able terms, more complex structures are being explored – eg, at fund level. A type of facility that is frequently used by investment funds is the Net Asset Value (NAV) facility. NAV financing provides investment funds with flexible and effi- cient access to additional capital, based on the value of their portfolio investments. NAV financ- ing is often used when investors’ undrawn com- mitments are low, or when the investment phase
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