US direct lending activity remained historically high through the first half of 2025, with deal volumes in the second quarter edging slightly above the volume observed in the first quarter. The steady pace comes despite a confluence of economic headwinds, including persistent inflationary pressures tied to tariffs, elevated interest rates, and a sluggish M&A market, according to Debtwire’s US 1H25 Direct Lender Rankings Report. 

Direct lending volumes in the US amounted to USD 145.9bn across 1,366 deals in 1H25, compared with USD 176.3bn across 1,670 deals in 1H24, according to Debtwire data. The second quarter alone saw 690 direct lending deals, around 14 more than in the first quarter, and a lending volume of USD 74.5bn.

Despite narrowing spreads, direct lending loans continued to price at a premium of roughly 158bps over leveraged loans, with investments heavily concentrated in the TMT sector, which attracted over half of total capital, according to the report.

Market Share

Refinancing activity dominated the US credit markets in the first half of 2025, accounting for over a third of direct lending volume and driving issuance across high-yield bonds and leveraged loans, according to Debtwire data.

Leveraged buyouts represented the second-largest share of direct lending deal activity in 1H25, taking 27.5% of total deal activity. Dun & Bradstreet’s takeover by Clearlake was the biggest deal of the period, worth around USD 5.5bn, according to Debtwire data. Clearlake’s acquisition of the business services company was financed mostly by a unitranche loan, led by Ares. Pricing landed at SOFR+ 550bps, as reported.

Among the mid-sized deals, Consumer Cellular secured roughly USD 3.6bn from an HPS-led group of lenders to refinance its loans and fund a dividend to owner GTCR, as reported. The financing package featured a term loan of approximately USD 3.4bn, a revolving credit facility worth USD 200m, and USD 525m in preferred equity, as reported.

Overall, term loans dominated financings, with unitranche and revolving credit facilities taking a backseat in the deal landscape in 1H25.

Comparing direct lending and leveraged loan margins 

Senior unitranche direct lending margins were consistently higher and smoother than first-lien institutional loan margins throughout 1H25, with fewer dips and volatile trends. However, direct lending margin compression persisted in the first quarter, while in 2Q25 margins dipped to 499bps, one of the lowest levels seen since 2019.

The narrowing spread could be due to increased competition in private credit markets and more favorable borrower conditions. Margins could also have tightened in response to a broader slowdown in market activity, according to Vishal Rana, Managing Partner at Sarva Capital.

Meanwhile, first-lien institutional loan margins were also near their lowest point in 1Q25, dipping to around 326bps. The second quarter shows a slight uptick, but the tight pricing in the leveraged loan market remains well below historical averages. The spread between the two margins in 1H25 stood at over 158 bps, reflecting a compression from the peak levels of 2020 and 2022.

Sector trends

The TMT sector attracted the highest level of direct lending investment in the US in 1H25, totaling USD 52.6bn.

This represents more than twice the amount directed toward the next largest sector — agriculture, industrials & chemicals — which recorded USD 19.22bn in direct lending investments.

Healthcare and finance followed with USD 16.8bn and USD 15.61bn in investments, respectively. Overall, investment is heavily concentrated in the top four sectors, with TMT alone exceeding the combined total of the six lowest sectors.

Rankings highlights

Among direct lenders, Ares claimed the top spot in Debtwire’s 1H25 US Direct Lender Rankings, registering 101 deals in 1H25, accounting for 9.47% of the market.

MidCap Financial took second place with 6.94% of the market share and a deal count of 74, while Apollo followed behind in third place, with 6.1% of the market share and a deal count of 65.

In fourth and fifth place were Audax Private Debt and Churchill Asset Management, with deal counts of 62 and 55, respectively.

Audax Private Debt also ranked first place in Debtwire’s 1H25 US Large Cap Direct Lender Rankings, with a deal count of 32 and a 24.24% market share.

“Amid a complex environment in the first half of 2025, demand for private credit remained strong as sponsors pursued acquisitions, refinancings, and growth within existing portfolios,” Steve Ruby, co-head of originated debt at Audax Private Debt, told Debtwire. “At Audax Private Debt, we remain focused on disciplined underwriting and delivering tailored financing solutions to support sponsors across market environments, and we’re proud to be recognized among the top US direct lenders in the first half of 2025,” he concluded.