You can see something that isn’t quite evident in the headline figures if you walk around the trading floors of any major European bank right now. With spreads close to all-time lows, borrowing at record levels, and no signs of a systemic collapse, the corporate debt markets appear stable. Lawyers, judges, and creditors are genuinely uneasy about how distressed companies are actually managing their obligations, despite the apparent calm. Sometimes in the middle of a crisis, the old script is being rewritten, and not everyone is on board with the new version.
By the end of 2025, the total amount of outstanding corporate debt worldwide had surpassed USD 59.5 trillion. This figure is so enormous that it becomes abstract unless you take into account that a significant portion of it was issued during periods of almost zero interest rates and is now maturing into a world that is very different from the one in which it was borrowed. At the refinancing window, businesses that funded expansions, leveraged buyouts, and AI infrastructure bets during less expensive times are facing reality. The terms are unworkable for some of them. What’s interesting and, depending on where you stand in the capital stack, concerning is what they’re doing about it and how their creditors are reacting.
| Category | Details |
|---|---|
| Global Corporate Debt (2025) | USD 59.5 trillion outstanding — comprising USD 36.4 trillion in bonds and USD 23.1 trillion in syndicated loans |
| Record Issuance Year | 2025 saw approximately USD 13.7 trillion in new corporate debt — the highest ever recorded |
| AI Capital Expenditure Forecast | Nine major hyperscalers projected to spend USD 4.1 trillion between 2026 and 2030 — much of it debt-financed |
| Restructuring Activity | Chapter 11 filings hit a 10-year high in 2025; activity expected to rise further through 2026 |
| Key Trend | Rise of liability management exercises (LMEs) — private, contract-based debt restructuring bypassing court proceedings |
| EY-Parthenon Survey Finding | 68% of workout banking professionals across 25 countries expect restructuring cases to increase in early 2026 |
| Dominant Strategy Shift | “Amend-and-extend” and consensual refinancing replacing formal insolvency filings as preferred tools |
| Notable European Cases | Hunkemöller, Selecta, Victoria — early test cases for LME legality under European law |
| EU Legislative Development | “Insolvency III” directive signed into law early 2026 — introducing pre-pack sales procedures across member states |
| Credit Spreads Paradox | Despite record borrowing and geopolitical pressure, corporate credit spreads remain near historical lows globally |
The aggressive expansion of what practitioners refer to as liability management exercises, or LMEs, is the most significant change. Moving assets, changing the terms of debt, and obtaining new funding at favorable rates are all examples of private restructuring strategies that are carried out through contractual procedures rather than official court filings. They first appeared in the United States in the early 2020s, when private equity sponsors introduced some particularly aggressive versions. In 2025, they made their way to Europe, where cases like Hunkemöller and Selecta sparked the first significant legal challenges. European courts are currently being questioned about more than just the efficacy of these structures. Who gets to decide if they are fair.
Observing this unfold concurrently in London, Amsterdam, and Frankfurt gives the impression that the legal frameworks governing debt restructuring were not intended for instruments this flexible or creditor groups this dispersed. A clear hierarchy of claims, a manageable number of lenders, and a degree of shared interest in maintaining the underlying business were all presumptions of the traditional restructuring model. In 2026, none of those presumptions are as clear-cut as they once were.
A growing portion of corporate creditors are now investment funds, exchange-traded funds (ETFs), and principal trading firms; these entities have shorter time horizons and are less tolerant of protracted consensual procedures. The actual behavior of restructurings is being altered by this change in debt ownership.
No one has yet to fully map the additional layer of complexity brought about by the AI spending wave. According to OECD estimates, between now and 2030, nine major technology companies alone may require USD 4.1 trillion in capital, most of which will probably come from debt markets. The physical foundation of this growth, data centers, are being financed as though they have a long useful life and a predictable value as collateral. That assumption might be true. It’s also possible that it doesn’t, and that the resulting credit risk resembles equity exposure much more than what conventional lenders are charging.
Something more akin to a multi-front negotiation than a formal legal process is emerging, albeit imperfectly and unevenly across jurisdictions. To oppose LMEs, creditors are forming cooperative agreements. These agreements are being contested by debtors on antitrust grounds. German courts are debating whether German-law debt should be governed by English restructuring tools. Even seasoned professionals who experienced the 2008 cycle find it controversial in a way that seems novel.
That crisis came hard and quickly. This one is coming gradually, increasing pressure in certain industries, such as retail, construction, and leveraged buyouts from the cheap-money era, while the overall market appears remarkably calm on paper. How long that calm lasts once the more anxious cases begin to seriously approach their maturity walls is still unknown.