Syndicated Scoop: Global H1 2017 Loans Review, Amazon $13.7bn Bridge Loan, and More
17 July 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.
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
Global - Syndicated Loans Review H1 2017: Everything's the Same
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.”
US – Bank Fees Leap from Record US Syndicated Lending
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.
EMEA - Syndicated Loans Hit by Emerging Markets Slump
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
Amazon Bridge Loan Heats Up Lukewarm M&A Financing
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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