Gambit Corporate Finance LLP’s Debt Capital Markets Review for February 2025 examines the latest developments in the debt markets, providing insight and analysis into the current domestic lending landscape
Inflation has fallen significantly from its peak of 11.1% in October 2022 to 3.0% in January 2025.
The Bank of England has reduced its base rate from 5.25% in July 2024 to 4.5% in February 2025. Capital Economics forecasts further base rate reductions to 3.75% by the end of 2025.
With the interest rate and inflationary environment stabilising, UK debt capital markets are transitioning from a “lender-friendly” environment and funding options are improving for well-prepared borrowers. We are seeing improved terms including:
- Enhanced leverage multiples
- Softening pricing
- More flexible use of funds and structures
Engaging experienced corporate finance advisors is crucial for mid-market borrowers to navigate evolving market dynamics, optimise pricing outcomes and structure tailored transactions that align with strategic objectives.
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