As M&A financing opportunities remain in the doldrums, private credit firms are forced to be flexible on certain terms in order to win the few deals that are out there. And recently, it’s call protections that are being sacrificed for direct lenders to appeal to borrowers.

Repricings were the theme of the 2024, and it is looking that is also going to be case in 2025 as borrowers take advantage of buyside demand. Meanwhile, banks are offering significant competition to direct lenders and have forced a compression in spreads — a battle that banks are much better positioned to win.