At the start of 2023, many industry participants were expecting more stable market conditions in the year ahead, in anticipation of an easing of the pressures applied by soaring inflation.

However, continued interest rate rises by central banks to mitigate inflation has ensured a continuation of an uncertain – and in many cases, extremely challenging – outlook for businesses. This has also significantly muted M&A (and therefore LBO lending) activity for a longer period, driven by overall macroeconomic uncertainty and higher cost of debt finance.

The latest edition of AlixPartners' bi-annual Mid-Market Debt Report covers more than 75 bank and non-bank lenders active in the UK and European mid-market (debt transactions valued up to €400 million).


  • Inflation across Europe remains at elevated levels, applying continued pressure to consumers and businesses alike, creating a challenging financial environment.
  • Mid-market deal-making continues to suffer as sponsors find it hard to close deals due to ongoing macro uncertainty, although slightly more resilient than large-cap M&A activity.
  • Extensions are dominating loan activity, given refinancing challenges and LBO softness, leaving few maturities remaining in 2023/2024 across European syndicated loan markets. However, these are resulting in significant premia on legacy rates creating pressures on borrower cash flows in the medium term. ABL activity has increased, as lenders seek security and borrowers look to reduce pricing.
  • There are signs that sponsors are more frequently handing over the keys as unhedged interest rate rises make portfolio companies unviable, and intensifying balance sheet stress may see restructuring activity increase.

Read the full report below: