The 2026 maturity wall starts here
The Covid loans drawn in 2020 reach final maturity in 2026, and the Bank of England already sees roughly 30% of UK leveraged-loan debt falling due by the end of 2025. For a lower-mid-market borrower, the refinancing calendar is now the planning calendar.
- Dated
- 22 February 2024
- Desk note
- Dated to the data
- Reading
- 7 min
Managing Director
Two waves of debt come due at roughly the same time. The Covid loans drawn in 2020, Bounce Back and CBILS on their original six-year terms, reach final maturity in 2026, with the 2021 vintage behind them in 2027. Layered on top, the Bank of England already sees about 30% of UK leveraged-loan debt falling due by the end of 2025. None of this is a surprise. That is why, for a lower-mid-market borrower, the refinancing calendar is now the planning calendar.
What is the 2026 maturity wall?
“Maturity wall” is the industry’s shorthand for a year in which an unusual amount of debt comes due at once. Two separate stories converge on 2026. The first is the Covid schemes: the Bounce Back Loan Scheme (£46.5bn lent) and CBILS (£25.8bn) were drawn overwhelmingly in 2020 on six-year terms, so the bulk of their final maturities lands in 2026, with RLS and the 2021 cohort following into 2027. The second is the wider leveraged-loan market, where the Bank of England, writing in 2023 and well ahead of the event, flagged a refinancing build-up cresting through 2025 and 2026.
The Bank put numbers on it. On its deal-level sample, about 2% of UK leveraged lending was due to refinance in 2023, rising to roughly 30% cumulatively by the end of 2025. What the chart below shows is the slope rather than the precise height of any single bar. The wall does not land in 2026 out of nowhere; it builds from here.
The Bank of England saw the wall before it arrived: about 30% of leveraged-loan debt due by end-2025.
| Period | Leveraged loans due (%) |
|---|---|
| By end-2023 | 2% |
| By end-2024 | 16% |
| By end-2025 | 30% |
- Leveraged-loan debt due to refinance, cumulative
Cumulative share of UK leveraged-loan debt due to refinance, on the Bank's deal-level sample. The Bank published two figures: about 2% due in 2023, rising to roughly 30% cumulatively by end-2025. The end-2024 column is a straight-line interpolation between those two published endpoints, not a Bank figure.
Source · Bank of England, Bank Overground (25 Aug 2023) and Financial Stability Report (July & December 2023)
≈30%
Share of UK leveraged-loan debt due to refinance cumulatively by end-2025, on the Bank of England's deal-level sample, up from about 2% in 2023. Across corporate bonds and leveraged loans combined, about 22%.
Source · Bank of England, Bank Overground (Aug 2023) & Financial Stability Report (2023)
Why the Covid loans still matter
It is tempting to treat the Bounce Back and CBILS facilities as yesterday’s problem: drawn in the emergency, surely repaid by now. The repayment data says otherwise. At the end of 2023, most Bounce Back facilities were neither fully repaid nor in default: they were still amortising, on schedule, toward a six-year maturity that lands in 2026.
The Covid debt is still on the clock: most Bounce Back loans are neither repaid nor in default. They are amortising toward 2026.
| Quarter | On schedule (%) | Fully repaid (%) |
|---|---|---|
| Dec 2022 | 68% | 11% |
| Mar 2023 | 66.5% | 11.1% |
| Jun 2023 | 64.8% | 11.5% |
| Sep 2023 | 62.9% | 12% |
| Dec 2023 | 61.1% | 12.5% |
- Still 'on schedule'
- Fully repaid
Share of Bounce Back Loan facilities by furthest life-event reached, by volume. The Dec-2022 point is the Bank's own figure rounded to whole percent in that release; the rest are reported to two decimals. The original 2020 loans carried six-year terms, so the surviving 'on schedule' cohort runs into final maturity in 2026.
The “on schedule” line is the one to watch. It is falling steadily, as some facilities repay early and a smaller number slip into arrears, but it was still above 60% at the end of 2023. That is a large cohort of 2020-vintage borrowers carrying a Covid balance that will reach final maturity in the same window as the leveraged-loan wall. A company that has a conventional facility maturing in 2026 and a still-amortising Bounce Back balance does not want to discover that overhang at the eleventh hour.
What it means for a £3–15m borrower
The reassuring part is that a foreseeable wall is a manageable one. A performing business refinances; the maturity wall is a timing risk, not a solvency event. The unforgiving part is what it does to the cost of leaving it late. When a large number of borrowers reach for the same lenders in the same eighteen months, the scarce resource is not capital. There is plenty of that, as the broadening of the lender market has shown. The scarce resources are lender capacity and attention, and the borrower who arrives twelve months early commands both.
Refinance early and you choose your lender and your terms. Refinance at maturity and you take whatever the market is offering that week.
Twelve to eighteen months before maturity is enough time to prepare the credit story, approach several lenders properly, and still hold the option to wait if the first terms are not good enough. Compress that to the last quarter before maturity and every part of your leverage evaporates: you cannot run a real process, you cannot walk away, and the lender knows it. The 2026 wall is less a reason to worry than a reason to put the date in the calendar now and work backwards from it.
Questions a CFO asks
Common questions
- Can I refinance a CBILS or Bounce Back loan before it matures?
- Yes. Government-backed Covid facilities can be repaid or refinanced early, and rolling a maturing scheme loan into a conventional facility is routine. The question is rarely whether you can. It is whether you do it from a position of strength, a year ahead, or under time pressure as the maturity lands.
- How early should I start refinancing a facility maturing in 2026?
- For a lower-mid-market facility, begin the work 12 to 18 months before maturity. That window is long enough to prepare the credit story, run a competitive process across several lenders, and still hold the option to wait if terms are not yet right. Start at six months and you have removed your own leverage.
- Is the maturity wall actually a problem if my business is performing?
- A performing business refinances; the wall is a timing risk, not a solvency one. But it raises the cost of leaving it late: when many borrowers hit the same window at once, lender capacity and attention are the scarce resources, and the borrower who arrived early gets both.