Syndicated loans review 3Q 2017: Goldman on the rise

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Worldwide syndicated lending reaches US$3.1 trillion

Global syndicated lending activity totaled US$3.1 trillion from 6,847 transactions during the first nine months of 2017, a 7% increase in proceeds and a 6% decrease in number of deals compared to a year ago. The United States captured the largest share of the global market, with US$1.8 trillion in syndicated loans, totaling 59% of overall proceeds. Lending activity in China declined by 36% compared to last year, totaling US$76.6 billion in completed loans.

Global acquisition financing down 4% compared to a year ago

Global acquisition financing reached US$611.0 billion during the first nine months of the year, accounting for 20% of total syndicated loan volume. Retail companies totaled US$50.4 billion, bolstered by M&A financing to fund Amazon’s US$13.7 billion takeover of Whole Foods Market. Total acquisition-related loans for technology companies reached US$41.6 billion from 83 transactions, down 66% compared to US$123.0 billion last year.

Americas lending up 23% compared to last year

Borrowing in the Americas accounted for 65% of global proceeds during the first nine months, totaling US$2.0 trillion from 3,401 transactions. European syndicated lending increased 1% compared to previous year, with US$584.1 billion in proceeds. Asia-Pacific lending decreased 17% compared to last year, totaling US$323.0 billion. The number of Europe and Asia-Pacific syndicated loans declined by 23% and 11%, respectively.

Energy and power activity accounts for 15% of total proceeds

The Energy & Power industry accounted for the largest share of the global market, with 15% of total deal volume with US$468.5 billion in completed loans. By number of deals, the Industrials sector was the most active industry during the first nine months, with 1,050 transactions totaling US$389.3 billion. Borrowing in the Telecommunications industry reached US$131.3 billion, a 47% uptick compared to last year and the largest percentage increase in any sector.

Bank of America Merrill Lynch tops the bookrunner rankings

Bank of America Merrill Lynch maintained the top ranking for global bookrunners during the first nine months of the year, capturing 10% of the global syndicated loan market with US$288.9 billion from 1,011 transactions. JP Morgan, Citi, and Wells Fargo retained their second, third and fourth rankings, respectively. Barclays rounded out the fifth spot, climbing two spots from a year ago. Goldman Sachs climbed to the 6th spot, up seven spots from last year.

Syndicated lending fees up 12% compared to last year

Estimated bookrunner fees increased 12% compared to the same period last year, reaching US$12.4 billion in total fees earned. The top ten global bookrunners, by proceeds, earned a collective US$5.2 billion in fees, representing 41% of the total fee pool. Compared to the first nine months of 2016, the top ten bookrunners shed a combined 1.8 points in market share.

Global loans bookrunners (R1) 3Q 2017: Thomson Reuters

Source: Thomson Reuters

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