Lenders are taking over a growing number of private equity-backed companies in a more creditor-friendly France, as borrowers that loaded up on debt before rates rose struggle to refinance.

Debtwire data shows France recorded 39 restructuring mandates in the first half of 2026, covering €14.57bn (£12.5bn) of debt.

Colisée is one of the most prominent examples. Senior lenders, including CVC Credit, KKR, Blackstone and HIG Capital, took the elderly care operator from EQT in a deal that cut its net debt by about a third to €1.2bn and brought in €285m of new financing.

The trend continued in June, when a group of bondholders agreed to take ownership of facilities management company Atalian.

Virginie Gasnier, managing director at Alvarez & Marsal Debt Advisory, said a 2021 reform, which brought the EU Restructuring Directive into French law and introduced cross-class cram-down mechanisms, had made the framework “notably more lender-friendly than it used to be”.

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The legal changes were also a way to attract international investors to the French market, according to Thomas Marcorelles, managing director at Alvarez & Marsal, who leads the firm’s French restructuring practice.

“It’s a scheme that works and we see some appetite from international investors and credit funds for the French market, who had bad experiences 15 years ago and are back on the market after this amendment in the law,” he said.

However, despite the market becoming more creditor-friendly in recent years, challenges remain, from political uncertainty to a looming maturity wall.

Marcorelles warned that the next presidential election could affect how the country is run and how debt is treated. While it would not change the law, “it will definitely impact the investor community”, he said.

Meanwhile, a lot of debt is set to mature in the next couple of years. “Our feeling is that the level of activity will be high by definition,” he said. “We also see that in the business plans there is still a lot of uncertainty and a lot of volatility in the market. So, it will definitely impact the level of restructuring in France.”

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Banks get tougher

Debt funds are not the only lenders changing their approach. During the Covid crisis, the French government pushed liquidity to companies through state-guaranteed loans, known as PGEs, provided by banks. Marcorelles said most of those loans have now been repaid or restructured, and that has changed how banks behave in negotiations.

“We are back to the pre-Covid world, where workout teams are pretty tough in discussions,” he said.

Some banks are choosing to sell instead, which is creating opportunities for credit funds.

“We’ve seen some debt trading on smaller cases, where traditional lenders decide to sell rather than go through a long-lasting restructuring,” Marcorelles added. “My feeling is that this will develop, even on smaller capital structures.”

Gasnier also expects funds to be dealing with more non-performing loans in the coming years, “which is precisely why the private credit secondary market is growing”.

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