146 European LBOs Underwent Debt-for-Equity Swaps Since 2017, 30 in 2025
Goldman Sachs found 146 European LBOs have undergone debt-for-equity swaps since 2017, including over 100 swaps since 2021 and 30 last year. The bank flagged concentrated stress in deal vintages from 2017-18 and warned of further credit events from 2023-25 portfolios due to tighter spreads.
1. Overview of Direct Lending Stress
Goldman Sachs’s report reveals that 146 companies involved in European leveraged buyouts have undergone debt-for-equity swaps since 2017, reflecting underlying credit stress despite a headline default rate of approximately 2% in private credit and syndicated loans in 2025.
2. Yearly Debt-for-Equity Swap Statistics
At least 30 swaps occurred in 2025, down from 43 in 2023 and 24 in 2024, with over 100 total since 2021, highlighting growing lenders’ control over portfolio companies.
3. Underlying Drivers of Stress
Stress is concentrated in deal vintages completed in 2017-18, which weathered the pandemic, inflation, rising rates and geopolitical tensions, and analysts anticipate more credit events from 2023-25 vintages due to tighter spreads and slower rate cuts.
4. Sector Concentration and Outlook
Smaller companies and cyclical sectors such as retail, consumer-facing businesses and sub-€20 million EBITDA firms account for most swaps, while pockets of stress also appear in healthcare and business services, indicating uneven impacts across sectors.