Green Private Debt market in 2019
Green private debt is highly prized by companies financing projects related to global warming : These loans are constantly increasing.
According to the Climate Bonds Initiative CBI, this market growth, very strong so far, reaches nearly 80% annually (i.e. 250 billion dollars in 2018).
The World Bank and the European Investment Bank have been financing green loans for 10 years, in order to invest in ecological transition: France being considered by the markets as the benchmark.
In addition, many projects are emerging in energetic sectors (Enel with 1.25 billion euros), while green securities are booming.
In 2019, French private debt markets are doubling. It is thriving, collecting more funds. It never stops growing.
Private debt loans are exploding (about + 50% each year) while global debt growth is decreasing by almost 10% since 2017.
French (mainly institutional borrowing) & international funds are investing much more in private debt. In Europe, UK is the leader in private debt market while France is 2nd. Germany, 3rd, is far behind. This phenomenon has increased since 2018.
France is now specialized in non-bank financing of companies in private debt (mainly in the goods or services sector), senior debt, mezzanine, Unitranche, structured debt (hybrid loan), subordinated debt.
Private debt markets are less dedicated to private equity these days. Corporate investments (in search of liquidity or better return) use it as a source of diversification.
Aurelie Delaleu
Sources :
The private debt market first appeared in the US. It financed companies with dis-intermediated debt funds.
https://www.privatedebtinvestor.com/european-private-debt-deals-grow-9-2018/