Trends in corporate direct lending 1H25

Stepstone

Research

15 Pages

StepStone Group reviews what is changing in corporate direct lending as rate tailwinds cool and competition tightens spreads. A key tension sits in plain sight: credit metrics look like they are stabilizing, yet policy uncertainty and tariff sensitive sectors can still surprise investors.

Date published: August 6, 2025

Key Takeaways

Spread compression: Pricing is tighter, with risk shifting from coupons toward underwriting discipline and documentation.
Credit healing signs: Interest coverage and leverage appear more stable, but earnings momentum looks uneven by sector.
Volume sensitivity: Deal flow can stay solid, yet softer M&A and IPO activity can quickly slow new lending.
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