Bank Loans Reclaim Market Share from Private Credit as Refinancing Wave Reshapes Credit Market Landscape
Miles Bennett
Heavily leveraged companies are swapping private-credit loans for syndicated deals at three times the rate of the reverse. The tug-of-war between banks and private lenders is redrawing competitive lines across the U.S. credit market.
Banks vs. private credit — who is actually winning?
JPMorgan and rating agency KBRA DLD data show companies refinance out of private credit into syndicated loans at roughly three times the reverse rate.
Year-to-date, bank-led refinancings total $9.2 billion; syndicated-to-direct-lender flows stand at about $9.0 billion — banks hold a slim lead.
Over all of 2025, however, private credit pulled $40.8 billion from the syndicated market while banks clawed back $34.1 billion. Private credit is still the net winner.
This means → banks are closing the gap but have not flipped it. The current wave looks more like a reconquest of lost ground than a full-scale reversal.
Why are companies switching — and how much do they save?
Pharma firm Catalent replaced Ares Management and Blue Owl Capital private loans with a $4.1 billion syndicated term loan, cutting borrowing costs by roughly 225 basis points.
In plain terms = on a $10 billion loan, that is $225 million less in annual interest — reason enough to go through the trouble of switching.
Insurance underwriter Fidelis Partnership is working with Morgan Stanley to refinance about $2 billion in direct loans; KKR-owned software firm Accuris plans to price a $700 million leveraged loan next week to replace private debt.
Why is private credit suddenly on the back foot?
Business development companies — BDCs, the main lending vehicles for private credit — have faced sustained net outflows this year, with assets shrinking broadly in Q1.
Blackstone Secured Lending Fund posted its steepest quarterly NAV decline in six years in Q2. This means → private lenders have less capital to deploy, and their bargaining power is slipping.
Barclays analysts Peter Troisi and Ishika Goyal noted that BDC outflows "have allowed some banks to compete more aggressively in commercial lending."
What is giving banks the confidence to push harder?
Fed seasonally adjusted data show bank commercial and industrial loan growth hit an annualized 14.2% in Q2, up from just 4.4% in the same period of 2025 — more than a threefold acceleration.
The U.S. Comptroller of the Currency said in January that easing leveraged-lending rules is designed to help banks compete better with private credit.
This reflects a regulatory pivot from "contain bank leverage exposure" to "let banks re-enter the fight" — giving the refinancing push a policy tailwind.
Are banks guaranteed to win? Where have they stumbled?
Baker Tilly hired Deutsche Bank to syndicate over $2 billion of private-credit refinancing, but the deal was shelved this week after investor bids fell short.
Collateralized loan obligations — CLOs, the single largest buyer of syndicated loans — are growing pickier; direct lenders are also tightening terms.
In plain terms = banks may be grabbing share, but syndicated-market buyers are not rubber-stamping every deal. If pricing does not clear, the transaction still falls apart.
Beyond syndicated loans, what other options are emerging?
Some speculative-grade borrowers are shifting demand toward the junk-bond market. Ancestry.com last month closed a $2 billion financing in which the bond tranche grew from $450 million to $950 million, while the loan tranche shrank from $1.75 billion to $1.05 billion.
KKR noted that fixed-rate bonds help companies hedge against short-end rate risk, and high-yield debt could play a bigger role in refinancing PE-backed borrowers.
This means → the credit market is evolving from a two-way "banks vs. private credit" contest into a three-way race — syndicated loans + high-yield bonds + private credit — giving borrowers a wider menu of choices.
Content is for reference only, not financial advice.