Syndicated Scoop: Brexit’s Impact on Loan Volumes, Uber’s US $1.15b Debt Deal, and More
This month's syndicated lending scoop: Brexit’s impact on loan volumes, Uber’s US $1.15b Debt Deal, and More
15 August 2016
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. Read on for a quick summary of this month’s Syndicated Scoop:
- The loan markets before and after Britain’s decision to leave the EU
- Ride-hailing company seeking out new sources of capital with its first leveraged loan
This Month’s Syndicated Scoop...
Many are concerned with syndication growth after Brexit, as volatility heightens again
Before Brexit: U.S. syndicated lending surged before Brexit, election volatility
- Budding optimism about the U.S economy and a brief lull in market volatility helped companies utilize low interest rates in the second quarter, driving syndicated lending up 55% from what was a four-year low in Q1. Though the $904.7 billion of loans issued in the first half was 6% below the same period last year, lending gained significant momentum. Investment-grade issuance leapt 67% to a quarterly record of $275 billion.
- Still, many are concerned with syndication growth after Brexit, as volatility heightens again. U.S syndicated lending has to slightly surpass the first-half pace to match last year’s roughly $2 trillion tally, according to Thomson Reuters.
Looking Forward: U.S. middle market lending poised to strengthen in second half
- In the U.S., lending to mid-sized companies is poised to increase overall in the second half of 2016. With a growing pipeline of M&A deals reported during the last two weeks of June amidst Brexit issues, and larger companies having flocked to the syndicated lending sector in a strong second quarter, it may now be time for the middle market to see some action, combining both successes through M&A-backed syndicated loans.
- Recently, Olympus Partners asked for $215 million in financing to back its acquisition of AmSpec Holding Corp, and the loan was provided by by Antares Capital, Bank of Ireland, ING, NewStar Financial and more. After the market got skittish during Brexit, Reuters explains that there should be “no shortage of available capital” and broad groups of investors looking to invest.
Uber raises $1.15 billion from first leveraged loan
Uber Technologies Inc. has raised $1.15 billion from a new high-yield loan, as the ride-hailing company is working to beat competitive threats from around the world. This loan, which is Uber’s first leveraged loan, brings the company’s total fundraising to more than $15 billion. Uber will pay a high yield of 5% on the loan, which was arranged by four banks, with Morgan Stanley leading and Barclays PLC, Citigroup Inc. and Goldman Sachs Group Inc.