European direct lending volume rebounds, amid support for software names

European direct lending activity has surged in the first half of 2026, driven by a surge in deal count and volume, with a particular boost in support for the software sector. The most recent data reveals a significant increase in direct lending takeouts, with a syndicated loan refinance by Dutch software firm Unit4 being among the highlights.

European private credit monitoring data shows that direct lending deal count now stands at 35 in the last three months to July, with estimated volume reaching €9.8 billion. While the year-to-date figures for both measures still lag behind 2025 levels, there has been a notable spread widening and a shift of borrowers towards broadly syndicated loans.

The Professional & Business Services sector remains the most active in Europe, with software and data integration leading the pack among sub-sectors. European direct lenders are currently charging a premium to finance software deals, particularly in the middle and upper middle market, with average spreads rising to E+525-550. Notably, a surge in BSL refinancing activity, totaling €4.8 billion over the last three months, is indicative of the rebound in European direct lending.