Syndicated Scoop: Toys ‘R’ Us Bankruptcy Affects Loan Market Credit Stats, and More

26 October 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...

  • On Toys ‘R’ Us bankruptcy and the credit markets
  • A look back on 3Q17 lending in the US
  • Syndicated lending in EMEA fell 9% (YTD) compared to last year

Credit Quality: Toys' Story

While lenders have been focused on retail woes all year, last week’s bankruptcy filing of Toys ‘R’ Us intensified the attention on the sector specifically – and on credit quality and protections in the loan market generally. But what does Toys ‘R’ Us actually mean for loan market credit stats? Toys’ filing pushed the institutional loan default rate in the troubled retail sector to more than 7% from August’s 5.3%, the LSTA reported.

3Q17 U.S. Primary Loan Market: The Usual Suspects

Third quarter 2017 saw a flicker of balance in August, bookended by the usual trends: too much institutional lender demand chasing too little loan supply. The LSTA discusses the technical trends – and consequent terms and conditions. Additionally, they provide a market outlook for future calendars in Q4.

EMEA syndicated lending reaches US$610bn this year

Syndicated lending in EMEA fell 9% to US$610bn in the first three quarters of 2017 compared with the same period last year, according to Thomson Reuters LPC data. The overall number of deals completed in EMEA year-to-date dipped 23% from the same point in 2016 to 987 as the market continues to be dominated by fewer but larger financings. M&A financing slowed throughout the year while investment-grade refinancing opportunities remained limited.

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