Intralinks for Financial Services—Syndicated Scoop is a newsletter providing a recap of the month’s top stories and insightful commentary related to the commercial and syndicated lending industry.
In this month’s Syndicated Scoop…
- Global syndicated lending hits US$2.1trn in H1 2017
- Amazon bridge loan is the second largest this year
H1 Loans Review
Reuter’s LPC Reports: “Global Syndicated lending activity increased 8.6% compared to the first half of 2016, totaling US$2.1trn from 4,605 transactions. The United States contributed the largest share of the global market, with $1.3trn in loan volume, representing 60% of overall proceeds. Lending in the United Kingdom increased 48% compared to the same period last year, totaling $111.6bn.”
H1 2017 saw a new record in US syndicated loan issuance that boosted bank fees to an all-time half-year high. Of the US$1.22trn issued, 75% of the loans were used to refinance existing debt from junk-rated companies, driving fees up to offset risk. Thomson Reuters LPC data shows that the jump in fees for leveraged loans counterbalanced falling fees on the $854m of investment-grade loans arranged during H1 2017, which is the lowest half-year issuance since H2 2013.
Lending to borrowers in the EMEA region hit an eight-year low in H1 2017, down 6% at $434bn compared to the same period last year. Thomson Reuters reports that lending was down due to a “huge” drop in borrowing opportunities in the Middle East. On the upside, the pipeline of new deals is building, which should bolster volumes in the third quarter.
Amazon Bridge Loan
A bridge loan for up to US$13.7bn to back Amazon.com’s purchase of upscale grocer Whole Foods Markets is the second-largest US bridge loan this year. Even with Amazon’s 364-day loan, which is also the 13th largest in the past two decades, US bridge financing of about US$57bn this year is 21% lower than the same period last year, including deals closed and in process. As a result, fee income for banks arranging and syndicating the bridge facilities and longer-term funding is being squeezed.
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