The Loan Syndications and Trading Association held its fourth annual private credit industry conference on May 12-13, 2025, in Nashville, Tennessee, bringing together industry professionals from direct lending funds, investment banks, LPs, rating agencies and law firms, according to a White & Case report.
Conference attendees expressed cautious optimism despite challenges facing the private credit market. While 2025 was expected to see M&A activity return to record 2021 levels, uncertainty in the global economy following “Liberation Day” and shifts in U.S. trade policy have halted global M&A activity, leaving many private credit funds waiting to deploy capital on new buyout financings. However, recent trade deals and tariff rollbacks have contributed to widespread optimism that global markets will stabilize with an uptick in M&A activity expected in the second half of 2025.
The conference highlighted increased competition as credit providers have raised record amounts for new funds while new entrants continue joining the market through consolidation. Combined with subdued buyout loan demand, this has created a situation where private credit financing supply significantly exceeds demand, compelling parties to innovate and remain flexible. This competitive landscape may pressure private credit firms to offer more favorable pricing and covenants to win deals, with lenders wary of a “race to the bottom” eroding their negotiating positions.
Despite competitive dynamics favoring borrowers on pricing and covenants, lenders continue negotiating for strong liability management protection provisions, including named provisions such as J. Crew, Serta, Chewy, At-Home, Pluralsight and Envision across deals ranging from lower middle market to large-cap sponsor transactions.
