Adapting to Volatility: Q2 2025 Credit Markets Report

Report Highlights

The private credit market has become the liquidity provider of choice through the first half of 2025.

• Q2 2025 was a challenging time for many private credit market participants. Both borrowers and lenders encountered market volatility driven, in large part, by public policy headwinds and geopolitical tensions.
• This volatility, as well as the broader macroeconomic uncertainty, contributed to a slowing of M&A activity. This slowing in turn reduced demand for credit.
• Conversely, this decline in demand catalyzed a sharp tightening of private market credit spreads. Thus, opportunistic borrowers—leveraged recap issuers most notably—are enjoying a compelling window of opportunity to take on leverage.
• Private market conditions continue to tilt heavily in favor of borrowers, as reflected in pricing, leverage and structure.

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Contact Michael Brill, Managing Director and Head of Private Capital Markets at Dinan Capital Advisors, for more report insights.