Private credit firms are reconsidering sustainable investment criteria to provide funding for Europe’s defence sector, which has gained urgency following US support concerns. While smaller funds can lend, many are restricted by environmental, social, and governance rules, particularly against financing weapons manufacturers; however, French officials are encouraging changes to these regulations. Despite these challenges, credit funds that have invested in defence have seen significant returns, and companies previously reliant on single lenders are now seeking multiple financing sources as interest in the sector rises.
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US arms groups woo European rivals as they target region’s rising spending
US defense companies are forming closer partnerships with European firms to capitalize on increased military spending in the region, driven by the war in Ukraine and pressure for European self-reliance. While emphasizing long-standing ties and collaborative development, concerns remain about US reliability as an ally and the implications of export regulations under the International Traffic in Arms Regulations (ITAR). Need More Context? 🔎
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