BNP Paribas Open Summit 2025 Key Insights 3rd Edition

Private Credit as the Nexus of BDCs and Insurance Companies

Insurance and business development companies (BDCs) are converging on private credit, which has grown to become a major asset class since the 2008 financial crisis, when banks pulled back from risky lending due to increased regulations—and private lenders stepped in to fill the void.

By virtue of serving as closed-end funds that invest in smaller companies below investment grade, BDCs bridge the gap between private credit and publicly traded securities. They can offer similar characteristics to the former—yet in the more liquid form of the latter. At the same time, insurers have transformed their balance sheets to invest increasingly in private credit. 

At BNP Paribas’ Insurance and BDC Conference, clients from both sectors had the opportunity to discuss—among other matters—private credit as a common area of interest: an asset class that can provide diversification and the potential for attractive returns.

The Questions Facing European Banks with Basel IV

At our 10th annual Yankee Bank Conference, the latest set of banking regulations, known as Basel IV, took center stage in conversation. Some believe Basel IV is misguided in its imposition of a numerical risk-weight floor on banks.

Under the previous Basel regime, banks calculated capital requirements for their exposures according to their own statistical views on the riskiness of those exposures. Yet now with Basel IV, this calculation is determined by a numerical floor that regulators define for each type of exposure, which could distort the capital requirements for low-risk businesses and exceed what is actually necessary.

With low-risk exposures having higher capital requirements—and with the prevalence of low-risk banking business in Europe—European banks, including Yankee banks, are more affected by Basel IV than their U.S. counterparts. Basel IV thus raises critical questions: Should European banks revisit their business strategy? Assume fewer low-risk exposures or take on more risk to achieve the same returns? Or pursue other strategies, such as credit risk transfers (CRT), to reduce their capital requirements?

Increased Capital Flows into Transportation

BNP Paribas sees large amounts of capital flowing into the transportation sector covering air, land and sea travel—including related infrastructure—from aircraft and shipping vessels to ports. Some market observers believe that the sector’s momentum of 2024 will continue in 2025—particularly as post-pandemic air travel continues to improve outside the U.S.

As we navigate the current macro and geopolitical environment, flexibility and creative thinking are going to be important in deploying capital and formulating debt- and equity-based solutions.

Take-private transactions have been featuring prominently as a theme in the transportation sector recently as capital structures and the cost of capital change, and as the hunt for growth persists.

A Solid Lender Base for Credit Markets

The credit markets— supported by significant inflows of capital into traditional and private credit—are in healthy shape and appear more strongly positioned for 2025 compared to sovereign debt markets.

Private-credit inflows compressed valuations across the board and benefited borrowers—including those who did not tap the private marketplace.

The buyer (lender) base of U.S. and European credit—including loans, bonds, asset-backed securities and private credit—seems to be not just bigger than ever, but also deeper and stronger. A lot of the money behind credit vehicles is coming from pension funds, endowments and insurance companies that don’t mark their credit assets to market, aren’t obligated to sell on interim volatility, and provide a sturdy and stable source of demand.

Opportunities in Leveraged Finance—and a Holding Pattern for M&A

The Leveraged Finance Forum was designed with the aim of bringing together clients from across the private equity, debt and investor ecosystems to create new connections, build relationships and facilitate conversations between peers and counterparts about pressing topics relating to leveraged finance.

In 2025, volatility may present leveraged lenders with ways to provide capital through opportunistic financing at a discount.

M&A is expected to ignite demand for leveraged finance to fund deals, but economic and geopolitical uncertainty continue to hamper transaction activity, which is at lower volumes than previously expected in late-2024

Opportunities for public-to-private transactions were limited when equity valuations were high, yet recent declines could rekindle prospects. And some predict that broadly syndicated loan and high-yield leveraged buyout (LBO) transactions will climb to more robust levels during the second half of the year.

Community: Scholarships

For the past decade, BNP Paribas has proudly supported high school students in the Coachella Valley, awarding scholarships to two outstanding young men and two exceptional young women each year. In this milestone 10th anniversary, BNP Paribas continues its tradition by granting $20,000 college scholarships to four remarkable Indio High School seniors, reaffirming its commitment to education, tennis, and community impact.

Scholarships presented during the BNP Paribas Open recognize students excelling in the classroom and on the court. These future leaders – Nicholas Aguirre, Ashley Beltran, Jessica Ramirez, and Noriel Sanchez – were honored at a special school ceremony and an on-court presentation at the tournament.

“Tennis instills many admirable qualities in a person – including pushing oneself to perform better and remaining committed. BNP Paribas, as a leading global bank, firmly believes in these principles and we see it as essential to inspire these traits in others,” said José Placido, CEO of BNP Paribas USA and CIB Americas. “We are thrilled to support these bright students as they take the next step in their education.”

Alongside our other global programs, the legacy of this initiative is a pillar of our commitment to supporting tennis at every level. It is for this reason that, when celebrating that BNP Paribas has renewed its sponsorship of the BNP Paribas Open for a further five years, we also announced that we have now committed to expanding this program – increasing the number of yearly BNP Paribas Open Scholarships from four to ten deserving seniors.

Tennis: Finals

Under perfect blue skies, Tennis Paradise delivered another unforgettable BNP Paribas Open Finals weekend. Saturday Doubles thrilled fans as Italy’s Sara Errani and Andrea Vavassori claimed the Mixed Doubles title. The Women’s Doubles final was a nail-biter in the second set, as Asia Muhammad of the US and Demi Schuurs of the Netherlands held off a charge by Brit Olivia Nichols and Tereza Mihalikova of the Slovak Republic to win their first team title.

Tennis legend Martina Navratilova was on hand for the beautiful Baccarat Shooting Star Trophy’s presentation by Chris Blum, Head of Corporate Client Group and Sectors & Advisory, North America, at BNP Paribas. On the men’s side, Marcelo Arevalo of El Salvador and Croatian Mate Pavic triumphed over American Sebastian Korda and Aussie Jordan Thompson to win the Men’s Doubles event and claim a trophy presented by Barbara Nash, Head of Technology, Media & Telecommunications Coverage Group at BNP Paribas.

Going into the Singles Finals, each match was a toss-up until Russia’s Mirra Andreeva, just 17, shook off a shaky start to stun Belarussian Aryna Sabalenka and win 2-6, 6-4, 6-3. In doing so, she became the youngest in 40 years to defeat both the world No. 1 and No. 2 at a WTA event. Andreeva received her trophy from Elise Hermant, Global Head of Communications for BNP Paribas Group.

Two rising talents – Brit Jack Draper and Dane Holger Rune – reached the men’s final with unexpected semifinal wins over top-ranked veterans Carlos Alcaraz of Spain and Daniil Medvedev of Russia, respectively. Draper dominated Rune 6-2, 6-2 to claim his first Masters 1000 title, receiving a trophy presented by Jean-Yves Fillion, Vice-Chairman of the Board of Directors of BNP Paribas USA. Both will now enter the top 10, a milestone for Draper, who becomes just the second Brit to win this championship after Cameron Norrie in 2021.

About the BNP Paribas Open Summit

The BNP Paribas Open Summit is a thought leadership event designed to provide corporate and institutional clients, issuers, and investors exclusive access to forward-thinking financial and practical insights hosted by BNP Paribas Corporate and Institutional Banking, Americas. The BNP Paribas Open Summit reflects our deep commitment to clients and is held in conjunction with the BNP Paribas Open, a premier tennis tournament where our values of equity, community engagement, and performance drive our support at all levels of the sport.

Against the backdrop of our title sponsorship of the BNP Paribas Open, the Summit hosts over 500 clients and features 9 business conferences over the course of two weeks. These conferences cover a diverse and comprehensive range of sector, investment and product-oriented topics.

Learn more about our client platforms and the breadth of our offerings for corporates and institutions across Global Markets, Global Banking, and Securities Services at BNP Paribas CIB – The bank for a changing world.

This material is for informational purposes only and is not intended to be a complete and full description of the products of BNP Paribas and its affiliates or the risks they involve.  Additional information is available upon request.  Neither the information nor any opinion contained in this material constitutes a recommendation, solicitation or offer by BNP Paribas or its affiliates to buy or sell any security, futures contract, options contract, derivative instrument, financial instrument, or service, nor shall it be deemed to provide investment, tax, legal, accounting or other advice.  All opinions, information, and estimates in this material constitute BNP Paribas’ or its affiliates’ judgment as of the date of this material.  This material is only intended to generate discussions regarding particular instruments and financing and/or investments opportunities and is subject to change, or may be discontinued, without notice.  This material should neither be regarded as comprehensive nor sufficient for making financing and/or investment decisions, nor should it be used in place of professional advice.  You should consult your own advisors about any products or services described herein in order to evaluate the merits, suitability, and financial, legal, regulatory, accounting and tax issues raised by any investment and should not rely on BNP Paribas or its affiliates for this.  Information contained herein is derived from sources generally believed to be reliable, but no warranty is made that such information is accurate, complete or fair and should not be relied on as such. The offer and sale of securities to institutional investors may only be made through the U.S. registered broker dealer and futures commission merchant entity, BNP Paribas Securities Corp.