US middle market loan issuance weakens despite direct lending rebound in 3Q26

Overall US middle market loan issuance weakened in 3Q26, although sponsored direct lending bucked the broader trend, rebounding from the recent low recorded in the prior quarter. Sponsored direct lending volume increased by 31% quarter-over-quarter to US$27.4bn. In contrast, sponsored syndicated issuance declined by 28% to US$9bn, while non-sponsored syndicated issuance fell by 24% to US$25.3bn. Despite the notable rebound in 3Q26, sponsored direct lending volume was just 5% above its 1Q26 level and remained 16% below the same period last year. On a year-to-date basis, middle market sponsored direct lending volume is down 25% year-over-year to US$74.4bn.