Lenders hold nerve in volume vacuum

Published: November 30, -0001

The CEEMEA syndicated loan market is in a period of stasis, with not enough M&A activity to satiate bankers’ needs and the latest rounds of refinancing runn´´´ing dry, but there is some evidence that the pipeline is beginning to fill up again after a dreary start to the year.

Borrowers in the region only signed US$32bn-equivalent of syndicated loans in the first quarter of this year, according to Dealogic. This is a 35% drop in volume year-on-year that roughly corresponds to the number of loans signed, which is 64 in the first three months of this year against 95 in the first quarter of 2016.

“There is still a great deal of uncertainty and that clearly impacts on loan volumes,” Nicholas Voisey, managing director at industry body the Loan Market Association, told EMEA Finance. “For loans to be firing on all cylinders, we need to see more M&A. We need more US$5bn, US$10bn, US$20bn deals, and that’s not happening.”

The largest loan of the year so far in the region is a US$4.245bn loan for Kuwait National Petroleum that signed on May 30, according to Dealogic. The facility was raised to finance its ‘clean fuels’ project, which will expand and make existing plants more eco-friendly.

The largest 10 trades of the year so far raised US$25.78bn as of July 21. None of them were M&A related transactions.

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