First Quarter U.S. Syndicated Loan Volume Hits $200 Billion, According to LPC

Apr 02, 2001, 01:00 ET from Loan Pricing Corporation

    NEW YORK, April 2 /PRNewswire/ -- Syndicated loan volume to U.S. companies
 sank to $200 billion in the first quarter of 2001, the lowest quarterly total
 since the first quarter of 1999, according to Loan Pricing Corporation, a New
 York City-based firm that tracks and analyzes the global bank loan and
 high-yield bond markets.
     While the first quarter saw an increasing number of credit downgrades and
 defaults among corporate borrowers, as well as fears of recession tamping down
 activity throughout the financial markets, lenders and borrowers strove to
 adjust to the new financial climate.  Instead of shutting down the loan
 market, arrangers and borrowers instead emphasized the borrower-lender
 relationship and expanded the range of investors they approach.  The loan
 market has seen more institutional investors being courted for and taking part
 in credits for investment grade corporate borrowers.
     "The limited capital in the bank market and investor demand for high-grade
 assets continue to merge nicely," said Jim Davis, president of LPC referring
 the trend in the loan market to structure investment grade bank loans with
 institutional term loans.
     The first quarter of 2001 saw little M&A activity and volume sank to
 $45.49 billion, down from $73.70 billion in the fourth quarter of 2000.
 Increasingly, M&A loans were not syndicated widely, but held by a small
 club of banks as short-term bridge loans to the bond market.  Refinancing
 volume did recover some this last quarter rising to $43.32 billion from
 $35.52 billion in the fourth quarter of 2000.
     While banks and institutional investors stock their portfolios with more
 stable investment grade loans, appetite remains for quality leveraged loans.
 Leveraged loans are defined as loans rated below investment grade and yielding
 at least 1.5% above the London Interbank Offered Rate.  Double-B rated credits
 in non-telecom sectors were the credits of choice in the first quarter.
 However, with a resurgent high-yield bond market spurred on by the Federal
 Reserve's interest rate cuts, bonds paid down loans further increasing
 investor's cash holdings.  When quality credits did appear, such as leveraged
 buyout credits for Dresser Inc. and Performance Materials, investors eagerly
 stepped up.
     J.P. Morgan was the leading lender during first quarter of 2001, logging
 $76.50 billion.  Citibank/Salomon Smith Barney finished second overall,
 tallying $30.35 billion.  J.P. Morgan also led leveraged lending, with
 $12.12 billion this year.  Bank of America was not far behind, posting
 $9.52 billion in leveraged lending. (Complete league tables are available via
 LPC and in a separate release dated April 2, 2001.)
 
     Loan Pricing Corporation, based in New York City, collects, analyzes and
 publishes loan data in databases and publications including DealScan(R), a
 database of nearly $5 trillion in C&I loans since 1985, LoanConnector, a
 real-time loan syndications and news service, and Gold Sheets, the industry's
 leading weekly publication of loan news, data and analysis.  LPC has available
 for publication specific data, league tables and analysis on numerous
 industries, including media/communications, healthcare, oil & gas, real
 estate, supermarkets and financial concerns.  Borrowing information on
 specific companies also is available.  Info: 212-489-5455 or
 info@loanpricing.com.  On the Web: http://www.loanpricing.com
     LPC is a Reuters company.
 
 

SOURCE Loan Pricing Corporation
    NEW YORK, April 2 /PRNewswire/ -- Syndicated loan volume to U.S. companies
 sank to $200 billion in the first quarter of 2001, the lowest quarterly total
 since the first quarter of 1999, according to Loan Pricing Corporation, a New
 York City-based firm that tracks and analyzes the global bank loan and
 high-yield bond markets.
     While the first quarter saw an increasing number of credit downgrades and
 defaults among corporate borrowers, as well as fears of recession tamping down
 activity throughout the financial markets, lenders and borrowers strove to
 adjust to the new financial climate.  Instead of shutting down the loan
 market, arrangers and borrowers instead emphasized the borrower-lender
 relationship and expanded the range of investors they approach.  The loan
 market has seen more institutional investors being courted for and taking part
 in credits for investment grade corporate borrowers.
     "The limited capital in the bank market and investor demand for high-grade
 assets continue to merge nicely," said Jim Davis, president of LPC referring
 the trend in the loan market to structure investment grade bank loans with
 institutional term loans.
     The first quarter of 2001 saw little M&A activity and volume sank to
 $45.49 billion, down from $73.70 billion in the fourth quarter of 2000.
 Increasingly, M&A loans were not syndicated widely, but held by a small
 club of banks as short-term bridge loans to the bond market.  Refinancing
 volume did recover some this last quarter rising to $43.32 billion from
 $35.52 billion in the fourth quarter of 2000.
     While banks and institutional investors stock their portfolios with more
 stable investment grade loans, appetite remains for quality leveraged loans.
 Leveraged loans are defined as loans rated below investment grade and yielding
 at least 1.5% above the London Interbank Offered Rate.  Double-B rated credits
 in non-telecom sectors were the credits of choice in the first quarter.
 However, with a resurgent high-yield bond market spurred on by the Federal
 Reserve's interest rate cuts, bonds paid down loans further increasing
 investor's cash holdings.  When quality credits did appear, such as leveraged
 buyout credits for Dresser Inc. and Performance Materials, investors eagerly
 stepped up.
     J.P. Morgan was the leading lender during first quarter of 2001, logging
 $76.50 billion.  Citibank/Salomon Smith Barney finished second overall,
 tallying $30.35 billion.  J.P. Morgan also led leveraged lending, with
 $12.12 billion this year.  Bank of America was not far behind, posting
 $9.52 billion in leveraged lending. (Complete league tables are available via
 LPC and in a separate release dated April 2, 2001.)
 
     Loan Pricing Corporation, based in New York City, collects, analyzes and
 publishes loan data in databases and publications including DealScan(R), a
 database of nearly $5 trillion in C&I loans since 1985, LoanConnector, a
 real-time loan syndications and news service, and Gold Sheets, the industry's
 leading weekly publication of loan news, data and analysis.  LPC has available
 for publication specific data, league tables and analysis on numerous
 industries, including media/communications, healthcare, oil & gas, real
 estate, supermarkets and financial concerns.  Borrowing information on
 specific companies also is available.  Info: 212-489-5455 or
 info@loanpricing.com.  On the Web: http://www.loanpricing.com
     LPC is a Reuters company.
 
 SOURCE  Loan Pricing Corporation