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News in brief
Private credit firms brace for Bank of England’s 2026 stress test
by Kathryn Gaw
More than a dozen private credit fund managers have volunteered to participate in the Bank of England’s private market stress test, which is expected to take place in two stages across most of 2026.
The test — first reported by Creditflux in October — will interrogate how private markets would react during an economic downturn and the implications that this may have on the UK’s economy. It will look specifically at potential vulnerabilities related to the use of leverage, valuation challenges, and the extent of the sector’s reliance on credit rating agencies.
At the time of writing, 16 firms had agreed to participate. They are: Apollo Global Management, Arcmont Asset Management, Ares Management, Bain Capital, Barings, Blackstone, Carlyle, CD&R, CVC Credit Partners, Goldman Sachs Asset Management, Hayfin Capital Management, Hg, ICG, KKR, Oaktree Capital Management and Permira.
“This exercise provides a unique opportunity to work collaboratively with firms to build system-wide understanding,” said Sarah Breeden, deputy governor for financial stability at the Bank of England, at the launch of the test period on 4 December.
Data centre development dwarfs all other infrastructure spending
by Lisa Fu & Shant Fabricatorian
European debt markets will hit the ground running in 2026, as AI-related financing needs and M&A conversations fuel a pipeline of deals for January.
As a large infrastructure bank, MUFG sees a lot of supply coming from the data centre space, according to the firm’s co-head of EMEA Capital Markets, Fabianna Del Canto.
“The absolute quantum required by the data centres dwarfs any other type of infra spend we’re seeing,” she said on a recent episode of the Credit Exchange with Lisa Lee podcast. “I do think it’s right to point to this as a real seminal moment and period in time, in terms of how we’re shaping the economies going forward.”
Del Canto added there has been a step-change in the capex requirements around the AI data boom, but in Europe there are additional concerns around how to address the energy needs associated with the rise of AI.
“In Europe, you’re seeing a lot of discussion among leaders in the energy space trying to solve this from a sustainability angle,” she said. “It’s not energy at any cost or any type.”
Heading into next year, Del Canto expects that capital markets will be just as busy as they were in 2025, if not more so. There is a healthy amount of dialogue around leveraged buyouts in Europe, so the pipeline looks strong for LBOs and M&A. Global issuers have been coming to EMEA in bigger numbers than they have over the last year as the market is providing a more attractive cost of capital and more stability on a relative basis, and that looks set to continue.
“We see a very healthy pipeline,” Del Canto said.
Operators tap securitisation deals to fund Europe’s data centre boom
by Nathan Tipping
Data centre operators in Europe are looking for new ways to finance the infrastructure underpinning the ongoing boom in cloud computing and artificial intelligence. And they appear to have found the solution in securitisation markets.
Vantage was the first operator to bring the asset class across the Atlantic. The company issued an ABS backed by tenant leases on two data centres in Wales in 2024. This year, it priced two more transactions: one backed by assets in Berlin and Munich, and a tap of its original UK deal.
“We won’t be surprised to see more transactions next year, especially from the FLAP-D markets,” said Mirco Iacobucci, associate managing director at Morningstar DBRS, referring to Frankfurt, London, Amsterdam, Paris and Dublin.
Corporate bonds and loans have long been operators’ go-to source of funding for data centres in Europe. But securitisation can be cheaper and allows diversification away from banks.
Experts foresee the European market following a similar path to the US. Five years ago, data centre securitisations were rare. But as of November 2025, the outstanding US market totalled USD 82bn — a ninefold increase in five years, according to Bank of America Research.
“From a European perspective it’s still a niche,” said Darrell Purcell, director of EMEA structured finance at S&P Global. “But what we’ve seen in terms of pick-up in the volume of issuance in the US will feed into Europe over the next one or two years.”
Data centre capacity in Europe is on course to double to around 18 gigawatts by 2028.
Correction: An article published in the November 2025 issue about new CLO manager Anthelion’s exposure to First Brands included a statement that around 5% of its first public CLO’s portfolio was believed to have been allocated to First Brands’ loan. This was incorrect. Creditflux apologises for the error.
Top stories on creditflux.com: warnings for 2026 but firms still plan moves into CLOs
27 November
Golub hires Fair Oaks’ CLO PM, signalling European expansion
Tyler Wallace, who left the role of European CLO portfolio manager for Fair Oaks Capital in November, is expected to start work at Golub Capital in February. His role will encompass CLOs as part of a remit that includes BSL and fixed income.
Wallace joined Fair Oaks Capital in 2018. He was responsible for corporate credit investments, including the management of the firm’s CLO business. Prior to that, he was head of corporate credit at Mediterranean Bank.
3 November
Coady takes helm of Blackstone’s global CLOs
The world’s largest CLO manager by AUM announced it had hired Laura Coady, formerly Jefferies’ global head of CLO origination, to serve as its global head of CLOs.
6 November
Non-traded BDC liquidity concerns grow after listed BDC sell-off
With most BDCs capping liquidity at around 5% of NAV per quarter, many individual investors in the wealth channel are exposed.
6 November
BlackRock launches securitised fund investing up to 30% in CLOs
BGF Securitised Fund will invest in triple A through triple B tranches of European and US CLOs.
13 November
‘Investor demand’ drove launch of multi-currency CLO, says Barings
Barings’ first-of-its-kind multi-currency European middle-market CLO is primarily euro-denominated but includes a GBP 103m triple A tranche issued in sterling.
14 November
ECB hits out at proposed overhaul of securitisation regulation
In a paper, the bank criticised myriad areas in the European Commission’s rethink of the continent’s securitisation framework.
17 November
Concerns grow about potential turn in credit cycle
Investors should monitor signs of late-cycle behaviour, with the possibility that pressure on leverage ratios may result in ratings downgrades, Goldman Sachs Asset Management said in its outlook for 2026.
19 November
Blue Owl calls off merger of two BDCs
The firm had planned to merge its listed BDC, OBDC, with the nontraded BDC, Blue Owl Capital Corporation II.
19 November
CLO fundamentals expected to weaken through 2026
The weakening will be driven by lower loan prices and increased ratings downgrades, according to Deutsche Bank’s 2026 European CLO outlook.
24 November
New loan shop Mountain Point eyes CLO move
The manager launched in November with a focus on broadly syndicated loans.
25 November
Record gross supply but meagre risk/reward ratio forecasted for CLOs
JPMorgan is forecasting a record half-a-trillion dollars for the US CLO market in 2026, but expects new origination to decline 20%.
27 November
Park Square appoints first European CLO PM
Ryan McGahon, who was at BlackRock, has joined the firm as it plans a European CLO.
1 December
LMEs under spotlight as lawsuit launches
The antitrust lawsuit from Optimum Communications, formerly Altice USA, could have a major impact on future liability management exercises.
