American debt funds enjoyed their best year yet in 2021, with volumes in the investment grade private credit market reaching $115 billion. Spurred by the pandemic, borrowers retreated somewhat from traditional bank lenders as banks pulled capital back during the period of economic uncertainty.
At the same time, private credit funds stepped up, providing a speed and certainty in transactions that impressed borrowers. The growing number of private debt lenders has created competition in the market, allowing borrowers to secure highly attractive covenants.
Not restricted by the same regulatory standards as bank lenders, debt funds have ventured into writing bigger tickets on more complex structures. We are finding that many private credit lenders are increasingly willing to buy into unitranche and super unitranche debt, with more sponsors relying entirely on private debt to fund a transaction and eliminating banks from the picture altogether. Companies and sponsors in hot sectors from TMT to healthcare to business services are increasingly turning to direct lenders to finance their M&A aspirations.
Today, borrowers are more knowledgeable about their options when it comes to debt financing and are demanding facilities that suit their needs. It is a borrower’s market, and they are willing to shop around among private debt lenders to secure unique debt structures, lending terms and interest payment arrangements they prefer.
In short, the U.S. direct lending market has never been larger, more competitive, or more complex—and GLAS has grown its business and capabilities alongside the borrowers it supports. We are there with our clients at every step, evolving to the ever-changing face of American direct lending. GLAS provides best-in-class service and unique experience on direct lending transactions, including:
- European prowess translates to the U.S. market: GLAS has serviced a vast amount of new money deals in Europe. The trust in us exhibited by European debt funds and sponsors is similarly being adopted on this side of the Atlantic. Our cross-border team is well-equipped to handle any transaction that comes through our doors, no matter the jurisdiction, timing or complexity.
- Experience across roles: GLAS has a multi-faceted, robust team ready to fill any agency role needed on a transaction. From administrative agent to collateral agent to payment agent, our team does it all. Moreover, our professional experts in each service communicate and collaborate with each other to make each step of the transaction process seamless for clients. Our team is prepared to service all kinds of transactions, whether it is holding securities in escrow in Latin America, Eastern Europe or Africa or working with deal parties across geographies.
- Speedy and accurate compliance: GLAS turns around KYC faster than anyone in the industry. We’re never one to hold up a deal, and we provide the highest caliber client service 24 hours a day, 7 days a week.
In the current direct lending environment, you need an agency partner who won’t blink when asked to service the increasingly complex financing packages behind today’s deals.