3 minute read
2025 Highlights
In 2025, borrowers across the region were attracted to our ability to lend directly on a relationship basis, and 85% of our originations were executed directly with companies. Transactions spanned a broad range of sectors including C-stores, construction machinery, manufacturing, grocery, and REITs. We also had active discussions with companies in food and beverage, consumer products, business services, and distribution, which we expect to carry into 2026.
Demand linked to data center and digital infrastructure buildouts accelerated, creating opportunities for borrowers in construction machinery, specialized manufacturing, and related industrial supply chains due to the level of activity required to build these facilities. Significant projects, including a large Louisiana development and multiple efforts in Texas, continued to drive indirect effects in terms of broader infrastructure spending.
The combination of continued strong demographic trends across the southcentral US alongside demand created from data center buildout drove growth opportunities for our clients and prospects that contributed to borrowing activity.
Private Placements
Shelf facilities were a major driver for activity in 2025, with all direct transactions being shelf‑driven. We established two new shelf facilities; the first was for a long‑time client returning to the private placement market after more than a decade. Speed and ease of execution were critical as they sought to fund capital expenditures and acquisitions.
The second company was a first-time issuer in the private placement market. They were attracted to the Shelf due to the combination of capacity alongside flexibility in terms of both draw size and duration. They appreciated the ability to manage interest rate risk via dollar-cost-averaging in modest-sized draws that match the size of their growth investments over time.
Ultimately, the outcomes of both transactions reinforced how central shelves were to our overall activity.
Direct Lending
Sponsor‑led LBO activity in 2025 remained somewhat soft. Most of the year’s direct lending flow came from refinancings and add‑ons to existing deals rather than new buyouts.
Outlook for 2026
Borrower sentiment entering 2026 is broadly positive, due in part to reduced levels of tariff uncertainty vs mid-2025. In particular, we anticipate another strong year for shelf activity, improved capital spending, and a more active M&A environment. Long‑term rates and spreads remain attractive, which may encourage additional issuance.
Contributors
