Defense in private credit

Overview

Europe and Canada spent $574B on defense in 2025, up 20% in real terms, and every NATO member but Spain committed to 5% of GDP by 2035. The banks held back: ESG mandates and reputational screens kept them away from munitions makers and the supplier base beneath the primes. Private credit is writing the first checks, and Europe-focused private debt raised a record $79.4B in 2025.

Four paths bring private capital into defense:

1. Blended buyout and credit deals, like Carlyle's financing for Bridgepoint's agreed buyout of Comrod

2. Growth capital with debt alongside, like Shield AI's $250M delayed-draw facility inside its $1.5B Series G

3. Dedicated funds from Tikehau, Warburg Pincus, Sienna and Veritas

4. Government programs courting private capital, like the Pentagon's new loan program for private credit funds

The report

This report maps the lenders underwriting defense debt and the deals defining the template, from credit-led buyouts of the supplier base to the venture debt behind the defense-tech rounds.

Table of contents

• Overview · page 3

• By the numbers · page 4

• Why now · page 5

• The capital cycle · page 6

• Underwriting · page 7

• Market map · Lenders · page 8

• Market map · Deals · page 9

• What to watch · page 10