Syndicated Scoop: What Made 2016 a Year for the Books?
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.
23 January 2017
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:
- US: Bank earnings from underwriting leveraged loans sank to a four-year low
- EMEA: 2016 saw the lowest total overall loan volume since 2012
- APAC: Loan volumes fell for the second consecutive year, despite an M&A boom
This Month’s Syndicated Scoop...
Refinancing drags fees on US leveraged loans to a 4-year low
Bank earnings from underwriting leveraged loans sank to a four-year low – falling by 12 percent in 2016 to about US$8.1 billion, the lowest since 2012. At the same time, total leveraged lending in the US rose by almost 12 percent in 2016, according Thomson Reuters LPC data. According to Freeman Consulting Services, these volumes alongside lower fees can be explained by sluggish business leading up to the US presidential election followed by a fourth quarter that saw a rush of refinancing deals that typically pay lower fees than new loans.
EMEA lending slumps to a four-year low of US$914bn in 2016
According to Thomson Reuters LPC data, syndicated lending in EMEA fell to US$914 billion – showing a whopping 21 percent year-on-year fall, and the lowest since 2012. Experts tie this fall to factors such as: lower-than-usual refinancing activity, patchy acquisitions and global economic and political developments. With persistently low oil prices, UK’s shock vote to leave the EU and the US elections, companies were hesitant to chance market volatility.
Asia Pac loans hit a three-year low despite Chinese M&A boom
Asia Pacific (ex-Japan) loan volumes fell for the second consecutive year, totaling US$463.8 billion in 2016, a three-year low. Bloomberg reports that “slower economic growth and geopolitical turbulence curtailed bank lending” despite a boom in M&A activity in China (i.e., ChemChina US$43.45 billion bridge loan).
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