Iberia – Year in Review & Outlook

3 minute read

2025 Highlights

PGIM’s Madrid-based private credit team saw activity across a range of sectors and asset classes in 2025, completing IG, BIG, Real Assets, and Direct Lending transactions throughout the year.  

Sports financing was a particular area of focus last year, with notable transactions involving prominent Spanish and Portuguese football clubs.  

Direct Lending activity was a highlight in the region with the team closing three transactions, two of which supported portfolio companies in upsizing their facilities.

Private Placements

Private placement activity in 2025 comprised of six transactions, including one below investment grade and five investment grade deals. Of these, four involved new issuers, while two were repeat issuers.  

One repeat transaction was a shelf draw by an existing portfolio company, highlighting the ongoing value of shelf facilities as a valuable lending instrument for borrowers seeking flexibility and access to long-term financings.

Direct Lending

Direct Lending activity in the region was very strong, with a notable increase in M&A activity in the latter part of the year.  

Transactions included both sponsored and non-sponsored deals with existing portfolio companies and new names. Proceeds were used to upsize facilities, and fund acquisitions. Our borrowers chose to partner with us due to our ability to provide flexible financing structures, our local presence  / relationship-driven approach, and our long-term investment philosophy.  

The robust pipeline of opportunities heading into 2026 suggests that Direct Lending will continue to be a healthy market of deal flow in Iberia.  

Real Assets

The energy sector drove Real Assets issuance opportunities within Iberia in 2025, particularly oil and gas related companies. This trend has been influenced by the gradual withdrawal of banks from the sector, creating opportunities for non-bank lenders to support these businesses.

Digital infrastructure is gaining momentum, with the team seeing particular interest in FiberCos, energy transition, and data center projects into 2026. Transportation also remains a consistent source of deal flow, as evidenced by the presence of several motorways in the portfolio and additional projects in the pipeline.  

Outlook for 2026

Looking to 2026, the team will look to continue to grow the Iberian portfolio across all sectors and asset classes, with both shelf facilities and Direct Lending expected to remain attractive solutions for companies.  

There is also considerable room for further growth in Real Assets transactions, particularly as opportunities in digital infrastructure and energy transition continue to emerge.  

This year also saw more opportunities to partner with local banks, and it is anticipated that this trend will continue, potentially resulting in more hybrid structures. The Spanish economy has demonstrated resilience and leadership within Europe, and this strength is expected to support a stable portfolio and attract a growing universe of prospects seeking to optimise their capital structures and achieve their growth ambitions.