Global syndicated loans flourish

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The global syndicated loan market grew in the first quarter of the year, led by strong growth in Europe, according to a report published by Dealogic.

The market increased by 13.2 per cent globally to $496.4bn in the first three months of the year, compared with the same period last year, the data provider said.

The growth was driven by a 26 per cent increase in European lending to $185.3bn, which more than offset a 1.4 per cent decline in the US market to $208.8bn, according to the preliminary figures.

The growth in Europe reflected the improved market conditions for borrowers, rather than a marked increase in demand for new funds due to corporate activity such as mergers and acquisitions, bankers said.

“The growth in Europe has been driven by the refinancing of deals, many of which were done only in 2004,” said Peter Ellemann, head of loan origination at ABN Amro in London. “Banks are simply churning the same money with the same clients at cheaper levels and with a longer tenor.”

The figures also reflected the different interest rates levels in the two regions. Eurozone interest rates have been unchanged at 2 per cent since June 2003, while US rates have risen to 3.75 per cent from 2 per cent in the past nine months.

Elsewhere, Japanese lending increased by 23 per cent to $45.7bn while activity in the rest of the Asia-Pacific region was unchanged.

The first quarter is traditionally the weakest of the year globally, and the Q1 figure for 2005 was 24 per cent below last year’s quarterly average of $653.5bn.

JPMorgan topped the league table of bookrunners with a global market share of 18.3 per cent, ahead of Citigroup and Bank of America. In

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