New York, March 31, 2005 - As first quarters go in the syndicated loan market - despite complaints of "not enough dealflow" from arrangers, bankers and investors - 2005's overall issuance of $260 billion was solid, according to Loan Pricing Corporation, a New York City-based firm that analyzes the global bank loan and high yield bond markets. Quarter over quarter, volume was up 27% from 1Q04.

Drilling into the sectors, issuance in the very seasonal investment grade market hit $110 billion, up 28% from a year ago; and leveraged lending (loans to companies rated below investment grade) topped $107 billion, posting a 25% increase from 1Q04. In the same leveraged universe, lending by non-bank investors (i.e. hedge funds, mutual funds, insurance companies) tallied $55 billion, up 31% from last year.

It was a recovering economy - and especially companies' and private equity shops' appetite for mergers - that drove the numbers. 1Q05's M&A lending surged more than 140% to $44 billion, contributing to the first quarter's $80 billion in net new issuance.

And yet, there were those incessant complaints of insufficient dealflow that led to falling margins over LIBOR and rising prices in the secondary market (where tranches of loans are traded on 100 cents to the dollar).

Where does that leave the market for the second quarter? According to a Loan Pricing Survey, most syndicators and investors expect spread pressure to continue across the investment grade and leveraged loan markets in the coming quarter. However, a softening high yield bond market might have a knock-on effect in the 2Q05 loan market.

J.P. Morgan maintains the No.1 bank loan lending spot in terms of volume for first quarter 2005, arranging $65.06 billion. Bank of America was second in overall lending, with $51.23 billion, followed by Citigroup ($41.68 billion), Wachovia ($17.97 billion) and Deutsche ($10.41 billion).

Rank	Bank Holding Company	Volume	# of deals	Market Share
1	J.P. Morgan	$65,057,382,000	161	25%
2	Bank of America	51,231,495,000	199	20%
3	Citigroup	41,679,585,757	73	16%
4	Wachovia Securities	17,969,805,000	68	7%
5	Deutsche Bank	10,412,531,348	26	4%
6	Credit Suisse First Boston	9,647,320,000	36	4%
7	Wells Fargo & Co.	7,428,829,368	46	3%
8	Morgan Stanley	4,568,875,048	7	2%
9	Goldman Sachs & Co.	3,987,500,000	11	2%
10	Lehman Brothers	3,610,250,000	11	1%

Leveraged Lending
Bank of America claimed the top spot in LPC's 1Q2005 Leveraged League Table, posting $19.56 billion. J.P. Morgan finished second in terms of leveraged lending with $17.12 billion, followed by Citigroup ($10.15 billion), Deutsche ($9.31 billion) and Credit Suisse First Boston ($7.09 billion). Leveraged loans, which often back M&A transactions and leveraged buyouts, have been prized by lenders because of the hefty interest rates and fees often paid by borrowers on those loans and related business.

Rank	Bank Holding Company	Volume	# of deals	Market Share
1	Bank of America	19,563,005,000	113	18%
2	J.P. Morgan	17,126,242,000	75	16%
3	Citigroup	10,149,506,300	30	9%
4	Deutsche Bank	9,317,531,348	23	9%
5	Credit Suisse First Boston	7,087,320,000	32	7%
6	Wachovia Securities	6,920,305,000	40	6%
7	Morgan Stanley	4,568,875,048	7	4%
8	Goldman Sachs & Co.	3,787,500,000	10	4%
9	CIBC World Markets	2,616,305,000	14	2%
10	UBS AG	2,346,250,000	13	2%

About Loan Pricing Corporation
Since 1985, Loan Pricing Corporation (LPC)'s DealScan database has captured detailed terms and conditions on over 139,000 loan and high yield bond transactions. It delivers its products, which include real-time news, data and analytics via LoanConnector, an Internet-based product distribution platform. Gold Sheets, LPC's flagship print publication, is the industry's leading weekly publication of loan news, data and analysis.

Return to top

 | © 2005 Loan Pricing Corporation | Privacy Policy |