Foley Hoag's Debt Finance practice demonstrated strong performance throughout 2024, serving clients across diverse sectors including renewable energy, technology, life sciences, cannabis, and private equity.
The practice's 2024 accomplishments span multiple areas of debt financing, including:
- Public company debt financings
- Fund finance capital call subscription facilities
- Private fund secured lending transactions
- Acquisition finance and recapitalizations
- Loan facilities for private emerging companies
Looking ahead to 2025, our team has identified several significant trends that will shape the debt finance landscape:
Change of Administration
The new administration's regulatory agenda suggests major changes in debt financing, particularly affecting clean energy, cannabis, and technology sectors. Enhanced oversight of ESG reporting and sector-specific lending will require adaptive legal strategies. We expect shifts in federal lending guarantees and credit support to create new opportunities for debt restructuring and financial innovation.
Private Credit Trends
Although traditional bank lenders are making efforts to reclaim market share, private credit continues to gain momentum, with direct lenders increasingly stepping into roles traditionally held by commercial banks. This shift is particularly pronounced in middle-market transactions, where flexibility in structuring and faster execution are paramount. The renewable energy sector remains particularly active for both banks and direct lenders, with consolidation opportunities as early-stage companies seek scale and established players pursue strategic acquisitions.
Super-Priority Facilities
Lenders who participate in syndicated credit facilities need to examine carefully the ability of the borrower and the majority lenders to impose future indebtedness that is senior to the existing secured credit facility. Private equity sponsors and opportunity fund lenders have become very aggressive in using such super-priority facilities in distressed situations.
Continued Rise of Venture Debt
The continued rise of venture debt underscores its growing importance as a source of capital for early-stage companies, with momentum in capital-intensive sectors such as life sciences, renewable energy, robotics and artificial intelligence. We are seeing rigorous underwriting, enhanced covenant protections, and sector-specific risk assessment by lenders. Both banks and direct lenders are balancing traditional lender protections with borrowers' unique operational requirements.
Access our 2024 Debt Financing Highlights and 2025 Predictions here.