US direct lending activity remained robust through the first nine months of 2025, with dealmaking volumes tracking slightly ahead of the comparable period in 2024 despite a complex economic backdrop.

Total direct lending volume reached USD 231bn across 2,506 deals in 9M25, compared with USD 223.16bn across 2,335 deals in 9M24, according to Debtwire’s 9M25 US Direct Lender Rankings. While refinancing remained the dominant driver of issuance, strong performance in TMT and industrials underpinned sector momentum, according to Debtwire’s US 9M25 Direct Lender Rankings Report.

Deal activity picked up steadily throughout the year, with volumes climbing from USD 69.55bn in 1Q25 to USD 71.18bn in 2Q25, before rising further to USD 90.25bn in 3Q25—the strongest quarterly total since 2Q24. The sustained pace comes against a backdrop of relatively high rates and softness in the broader US M&A market, as reported last month.

Market Share

Refinancing activity continued to dominate US private credit markets through 9M25, representing 39% of direct lending deal volume, compared with leveraged buyouts’ 25% share of market activity which was considerably below the peak 2021–2022 levels.

This trend carried across the broader credit markets, with refinancing activity taking an overwhelming 77% share of leveraged loan proceeds and 71% of high-yield issuance, according to Debtwire data.

Direct lending deal counts increased quarter-over-quarter, from 759 in 1Q25 to 799 in 2Q25, then accelerating sharply to 948 in 3Q25, underscoring a stronger pipeline of refinancings and recapitalizations.

There were several middle-market deals that kicked off post-Labor Day, including a debt raise by sweet baked goods manufacturer Café Valley. Meanwhile, Piper Sandler launched a USD 143.3m debt raise for Puget Collision, an operator of auto collision repair shops backed by Eagle Merchant Partners.

Term loans continued to dominate capital structures through 9M25, with unitranche facilities retaining strong relevance in both mid-market and upper mid-market transactions. Revolvers and preferred equity structures appeared less frequently, echoing the pattern seen in 1H25.

Comparing direct lending and leveraged loan margins 

Direct lending margins showed a modest uptick in 3Q25 after hitting multi-year lows earlier in the cycle. The long-term trend shows a steady compression in private credit spreads, driven by increased competition among lenders and improved borrower credit profiles, according to Debtwire data.

Throughout 3Q25, direct lending margins remained well above comparable first-lien institutional loan pricing. Leveraged loan margins declined to their lowest point in the entire observed period, reinforcing the persistent pricing gap between public and private markets. The spread between the two financing types in 2025 has hovered around 150bps–170bps, similar to 1H25 and down from the peaks observed during 2020 and 2022.

Despite narrowing spreads, private credit pricing continues to offer lenders meaningful compensation for illiquidity and structural protections, while borrowers benefit from execution certainty and flexible terms unavailable in broadly syndicated markets.

Sector Trends

The TMT sector remained the standout in 9M25, attracting USD 82.48bn, more than double the volume of the next-largest sector. High-growth software, digital infrastructure, and telecom service providers continued to draw significant sponsor appetite and lender support.

One of the most notable private credit deals of the last nine months was the KKR-led refinancing of Thoma Bravo-owned Flexera Software. The transaction included a USD 2.03bn term loan and a EUR 590m (USD 689m) loan, both priced at 4.75 percentage points above their respective currency benchmarks. While KKR’s credit division provided the largest portion of the financing, there was also participation from Ares, Golub Capital, Blackstone, HPS Investment Partners, and Thoma Bravo’s in-house credit unit, as reported at the time.

Earlier this year, Texas-based network infrastructure software provider Mavenir turned to private credit lenders for financing amid a wider restructuring effort. The addition of USD 300m of senior debt was completed in July, the company announced.

Industrials took second place with USD 31.17bn, while healthcare remained a top-three sector with USD 29.23bn, supported by strong demand across outsourced services, specialty care, and life sciences commercialization.

In August, MannKind Corporation (Nasdaq: MNKD), a company focused on the development and commercialization of inhaled therapeutic products and delivery devices for patients with endocrine and orphan lung diseases, secured an up to USD 500m financing deal with Blackstone.

The senior secured credit facility consisted of a USD 75m initial term loan funded at closing, a USD 125m delayed draw term loan (DDTL) and an additional USD 300m, uncommitted DDTL available at the mutual consent of MannKind and Blackstone, as reported.

Rankings Highlights

Ares retained its leading position in 9M25, with the highest deal count and market share of total direct lending activity, continuing the momentum observed in 1H25. Monroe Capital and Apollo took the second and third spots, respectively.

Audax Private Debt led the large-cap rankings by a significant margin, outpacing the next-closest competitor with nearly 30% market share.

Meanwhile, Antares held a commanding lead in the mid-cap segment, but Audax and Churchill remained close competitors.

Small-cap activity remained more fragmented, with Antares maintaining leadership, followed by Principal Alternative Credit and Ares, which were also active across smaller unitranche facilities.