The US private credit market, valued at $1 trillion, is watching borrowers seek better deals in Europe as defaults rise. The US default rate hit 5.8% in January 2026 and could climb to 8%, with 93% of US credit managers expecting flat or declining returns in 2026. Europe raised a record $65 billion in private credit through the first nine months of 2025, up 14% year-on-year. European direct lending transactions are typically priced 25 to 50 basis points higher than US equivalents, reflecting strong structural growth as non-bank lending penetration stands at only 12% versus 75% in the US.
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