Key Takeaways
- • Proskauer analyzed 450+ private credit deals in 2025 totaling $123.6 billion across nearly 120 private equity sponsors, revealing a market shift toward larger borrowers and higher leverage across U.S. transactions.
- • 39% of loans went to companies with at least $50 million EBITDA, up from 35% in 2024, demonstrating continued movement into mid-market and upper-middle-market segments with stronger cash generation profiles.
- • Average closing leverage increased to 5.1x from 4.8x in 2024, while average debt capacity reached 6.3x, indicating lenders are comfortable with 1.2x turns of additional debt cushion post-closing.
- • Health Care/Life Sciences, Manufacturing, Software/Technology, and Business Services collectively accounted for 57% of all deals, maintaining consistent sector concentration year-over-year.
- • Covenant-lite deals represented 21% of the market, with 91% of those deals concentrated in the EBITDA greater than $50 million segment; European pricing declined with cash margins averaging 5%.
Summary
Proskauer released its 15th annual Private Credit Insights Report on February 9, 2026, providing comprehensive market analysis based on 450+ transactions closed during 2025. The dataset represents nearly 120 private equity sponsors and $123.6 billion in total transaction value, offering granular insight into private credit market dynamics as the alternative lending sector continues its expansion.
The report documents a clear market trend toward larger, more cash-generative borrowers. Notably, 39% of loans were extended to companies with at least $50 million in EBITDA, up from 35% in the prior year. This shift reflects lender confidence in established business platforms and suggests that the private credit market is consolidating around higher-quality credits with demonstrated earnings stability. Simultaneously, equity contribution as a percentage of total capitalization declined to 46% from 47%, driven primarily by a significant reduction in deals with equity contributions exceeding 50%.
Leverage metrics expanded modestly but meaningfully in 2025. Average closing leverage increased to 5.1x compared to 4.8x in 2024, while average debt capacity climbed to 6.3x, leaving 1.2x turns of undrawn capacity at closing. This structure signals lender comfort with refinancing risk and suggests sponsors are retaining dry powder for operational growth capital or add-on acquisitions.
Sector concentration remained stable, with four industries—Health Care/Life Sciences, Manufacturing, Software/Technology, and Business Services—capturing 57% of all deal activity. This consistency indicates sustained institutional appetite for credit exposure in defensive, recurring-revenue, and operationally resilient verticals.
In the covenant-lite segment, 21% of deals carried minimal covenant protections, though 91% of these deals involved borrowers exceeding $50 million EBITDA. European pricing pressures emerged, with cash margins declining to an average of 5%, reflecting heightened competition and tighter spreads in that market.
The report documents a clear market trend toward larger, more cash-generative borrowers. Notably, 39% of loans were extended to companies with at least $50 million in EBITDA, up from 35% in the prior year. This shift reflects lender confidence in established business platforms and suggests that the private credit market is consolidating around higher-quality credits with demonstrated earnings stability. Simultaneously, equity contribution as a percentage of total capitalization declined to 46% from 47%, driven primarily by a significant reduction in deals with equity contributions exceeding 50%.
Leverage metrics expanded modestly but meaningfully in 2025. Average closing leverage increased to 5.1x compared to 4.8x in 2024, while average debt capacity climbed to 6.3x, leaving 1.2x turns of undrawn capacity at closing. This structure signals lender comfort with refinancing risk and suggests sponsors are retaining dry powder for operational growth capital or add-on acquisitions.
Sector concentration remained stable, with four industries—Health Care/Life Sciences, Manufacturing, Software/Technology, and Business Services—capturing 57% of all deal activity. This consistency indicates sustained institutional appetite for credit exposure in defensive, recurring-revenue, and operationally resilient verticals.
In the covenant-lite segment, 21% of deals carried minimal covenant protections, though 91% of these deals involved borrowers exceeding $50 million EBITDA. European pricing pressures emerged, with cash margins declining to an average of 5%, reflecting heightened competition and tighter spreads in that market.
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