Citi and BlackRock's HPS Launch €15 Billion European Private Credit Programme Targeting UK and Continental Sub-Investment Grade Debt
Citigroup and BlackRock's private credit unit HPS Investment Partners have signed an agreement to co-originate direct-lending deals across Europe under the banner of the Citi/HPS Private Capital Program, targeting up to €15 billion ($17.5 billion) of financings over the next five years. The programme focuses on sub-investment grade debt for corporate and private equity clients in continental Europe and the UK, with both senior and junior credit options on offer. The partnership will eventually extend to the Middle East. The deal represents one of the largest structured private credit collaboration agreements between a global bank and an alternative asset manager targeting the European market, and arrives as institutional appetite for non-bank lending to leveraged borrowers continues to deepen across London and continental financial centres.
Why this matters
The €15 billion commitment anchors a significant new source of sub-investment grade financing for UK and European borrowers at a moment when traditional syndicated loan markets face headwinds from rising gilt and bund yields. By pairing Citi's origination network with HPS's credit structuring capacity, the programme is designed to compete directly with incumbent European direct lenders on ticket size and structural flexibility. The UK nexus is explicit: the deal covers UK corporate and PE-sponsored borrowers alongside continental European counterparts, making English-law credit documentation likely to be the governing framework for a substantial portion of the book. The eventual Middle East expansion signals that the platform is being built as a global private credit distribution infrastructure, not merely a regional play.
On the Ground
Trainees on finance seats should flag this programme when reviewing mandate letters for leveraged finance or unitranche transactions — counterparty identity is no longer straightforward when banks act as co-lenders alongside credit funds. Watch for intercreditor agreement complexity where Citi holds a senior bank tranche alongside HPS junior paper on the same deal.
Interview prep
Soundbite
Bank-fund partnerships are redrawing who holds credit risk on European leveraged deals.
Question you might get
“How does a bank-sponsored direct lending co-origination platform like Citi/HPS change the intercreditor dynamics on a UK leveraged buyout financing?”
Full answer
The Citi/HPS programme reflects a structural shift in European capital markets where global banks are increasingly acting as distribution partners and balance-sheet co-investors alongside alternative credit managers rather than sole underwriters. For UK and European borrowers, this expands available financing capacity for sub-investment grade transactions beyond what any single institution can hold. The legal implications are significant: intercreditor arrangements, agency structures, and governing law elections become more complex when a regulated bank and an unregulated credit fund share the same credit. English law remains the dominant choice for cross-border European leveraged transactions, so London-based finance teams are likely to see a material share of this deal flow.
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