Thomson Reuters Syndicated Loans Review Q1 2014

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Global syndicated lending falls 14% from 2013

Global syndicated lending during the first quarter of 2014 reached US$856.4 billion, a 14% decrease compared to the first quarter of 2013 and the slowest opening period for lending in two years. Lending activity during the quarter saw a 29% decrease from the fourth quarter of last year. Just over 2,100 transactions closed during the first quarter of 2014, a decrease of 12% compared to first quarter 2013.

American Honda Finance, Community Health Systems top first quarter loans

American Honda Finance’s US$7.0 billion financing package to refinance existing debt topped the list of syndicated loans this year followed by Community Health System Inc’s $US6.8 billion loan to finance its purchase of Health Management Associates which closed in January.

US lending accounts for 57% of activity

Americas loans accounted for 62% of global loan volume during the first quarter of 2014, as lending in the region decreased by 3% from the same period last year. Within the Americas, loan volume in the United States totaled US$491.1 billion, down 4.5% compared to the same period last year and representing 57% of global volume. Europe accounted for 17% of global volumes as lending decreased by 35% compared to first quarter 2013. Asia Pacific fundraising saw a year-over-year decrease of 18%, while Japanese lending fell 22% compared to the first quarter of 2013.

Financials, energy & power and industrials lead lending

Borrowing in the financial sector totaled US$127.8 billion during the first quarter 2014, accounting for 15% of global loan activity, on par with global lending in the sector during first quarter 2013. Healthcare and consumer staples lead all sectors for syndicated loans with year-over-year gains of 49% and 47%, respectively. Financials, energy & power and industrials together accounted for 41% of syndicated loan volume during first quarter 2014 compared to 46% a year ago.

JP Morgan tops bookrunner rankings

JP Morgan maintained the top ranking for global bookrunners, by proceeds, with US$86.4 billion from 291 transactions during the first quarter of 2014, an increase of 0.5 market share points compared to first quarter 2013. Bank of America Merrill Lynch followed, with US$68.0 billion from 274 transactions, or 9.0% of overall loan proceeds during first quarter 2014.

Syndicated lending fees up 8%

According to Thomson Reuters/Freeman Consulting, bookrunning fees from global syndicated loans totaled US$4.4 billion during first quarter 2014, an increase of 8% from this time last year. Fees from leveraged lending increased 15% compared to first quarter 2013 and accounted for 79% of all lending fees during the first quarter of 2014.

Leading Underwriters Q1 2014 Thomson Reuters

Source: Thomson Reuters

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