Paris, le 22 Janvier 2024
Publication of the Aether FS Unitranche France index for the 4th quarter 2024
The Aether FS Unitranche France index continued its rebound in Q4 2024. The margin per leverage turn stands at 1.55%, compared to 1.50% in the previous quarter. Despite political instability, the French market maintained good momentum in Q4. The 2024 European balance sheet, however, remains mixed.
6-month rolling average interest margin/leverage ratio
As a reminder, the Aether FS Unitranche France Index serves as a benchmark for market conditions in the private debt sector and allows for the evaluation of the cost per leverage turn (excluding base rates) in unitranche operations in France.
In the fourth quarter of 2024, the index was calculated based on 39 unitranche operations carried out in France in the second half of the year, with a total amount deployed of 3.3 billion euros (equivalent to the amount deployed in the first half). Transactions were more concentrated in the “Lower Mid Cap” sector in H2, with the average debt amount at closing during the period being 85 million euros per operation, a significant decrease compared to 167 million euros in H1 2024.
It should be noted that Q4 was marked by an increase in closing margins (spreads) but a decrease in leverage levels, hence the rise in the Aether FS Unitranche France Index. The decrease in leverage can be partly explained by the rebound in long-term rates observed at the end of the year following the US elections.
Leverage at closing
Margin at closing
A contrasting year in Europe for 2024
At the European level, the M&A market overall rebounded in 2024, but only based on the total transaction value (+21%), while the number of transactions decreased compared to 2023 (-20%), according to LSEG data. Therefore, the 2024 balance sheet remains mixed.
It should be noted that banks responded to the call of Private Equity funds to support them more in their LBO transactions, competing with private debt players in this area. The latter had to adapt by offering more customized financing structures, notably through unitranche club deals to support upper mid-cap or large-cap operations, or through stretch senior structures in the low mid-cap, which are more suitable in terms of pricing for this market segment.
Aether Financial Services continues its growth
Finally, it should be noted that Aether FS completed its first full year as a payment institution authorized by the ACPR in 2024. This authorization, obtained in August 2023, allows Aether FS to manage third-party flows across the European continent. Aether FS has thus been able to accelerate its growth in the private debt sector and establish itself as the reference player in unitranche in France.
The arrival of a new shareholder, Capital Croissance, in July 2024, has allowed Aether Financial Services to strengthen its local footprint and now plans to open new offices in Paris as well as in Italy and Spain.