Spain’s leveraged finance market matures

Spain’s leveraged finance market is no longer just a bank-lending story. In 2025 and early 2026, refinancings, recapitalisations and fresh acquisition debt all returned, with banks and private debt funds increasingly financing the same deals together. (capital-riesgo.es) (practiceguides.chambers.com) Capital Riesgo reported that Spanish dealmakers now describe the market as more disciplined, with abundant liquidity, lower valuation pressure and more realistic leverage levels than during the post-pandemic reset. It said 2025 activity clustered around three buckets: refinancings, recapitalisations and new-money transactions. (capital-riesgo.es) That shift shows up in how deals are structured. Capital Riesgo said hybrid packages are becoming more common, pairing amortising bank debt with bullet tranches from debt funds so borrowers can stretch leverage without relying on one lender type. (capital-riesgo.es) Private credit has also become a bigger part of the Spanish funding mix, especially for sponsor-backed mid-market companies. Chambers wrote in March 2026 that the market was stronger than 12 months earlier, with lenders winning mandates when speed, certainty and bespoke terms mattered more than the lowest price. (practiceguides.chambers.com) The sector focus is changing too. Chambers said the most consistent private credit activity in Spain has been in energy transition and related infrastructure, as well as business services, healthcare, technology, media and telecommunications, software, and some real-estate-backed situations. (practiceguides.chambers.com) That matters because Spain’s investment agenda is getting larger and more specialized. The Green Finance Institute said Spain’s national energy and climate plan estimates €114 billion will be needed for renewable energy and related infrastructure between 2021 and 2030, while retrofit plans for 1.4 million homes are expected to mobilise roughly €32 billion of investment. (greenfinanceinstitute.com) Spain’s government is trying to widen the pool of capital available for that build-out. On February 16, 2026, the government said its new “Spain Grows” fund, managed by the Official Credit Institute, would mobilise around €120 billion in productive investment, with priorities including the green transition and innovative sectors. (lamoncloa.gob.es) Banco de España researchers have also been tracking the rise of private credit as an alternative to traditional loans. Their 2025 Financial Stability Review article said private credit still accounts for only a small share of total corporate lending in Spain, but the market is becoming more sophisticated, more international and more relevant for larger companies in technology, communications, industrial and trade. (ideas.repec.org) There is a limit to how far that shift goes. Chambers said larger, better-known Spanish borrowers have recently been able to refinance into syndicated loans or high-yield bonds, while many mid-market companies still stay in private credit because public markets require ratings, disclosure and a more complex execution process. (practiceguides.chambers.com) So the story in Spain is not banks being replaced by debt funds. It is a more layered market, with banks, direct lenders and public-backed vehicles each taking different parts of the financing stack as companies chase refinancing, acquisitions and transition spending. (capital-riesgo.es) (practiceguides.chambers.com) (lamoncloa.gob.es)