New York - June 30, 2005 - If second quarters in the syndicated loan market were horses, we'd be neck and neck with 2004. Total lending hitting a respectable $455 billion in 2Q05, down just 1% from year-earlier levels.

What's remarkably different is the structure of the loans. One year ago, borrowers took over the investment grade market and to win mandates, willingly replaced 364-day loans with five-year facilities. Now, 364 days later, few borrowers need to refinance - and many didn't. Not shockingly, investment grade issuance slumped last quarter, falling more than 10% to $220 billion. Without 364-day facilities to refinance, many borrowers simply didn't return to the market. All told, only 38 364-day facilities were done in 2Q05, down from 170 last year and 247 in 2003.

While the high-grade lenders were falling victim to their own success, leveraged bulls were proving resilient to the bond market's failures. Despite a major high yield meltdown, the leveraged market persevered, bloody, but unbowed. In fact, leveraged lending hit $138 billion, up slightly from a very strong 2Q04 - and just edging out the previous record. This increase emerged even as refinancing activity fell. Institutional issuance stood strong (or greedy) in the face of the downdraft and came away with $63 billion, just short of a record figure.

M&A lending jumped more than 50% from 2Q04, topping $66 billion in the second quarter. While some bankers whisper hopefully of a high-grade M&A revival, it was the leveraged buyers that buoyed the market. Sitting on piles of cash - and pressured to put it to work - sponsored shops kept up their buying spree. LBO lending hit $19 billion in 2Q05 and $33 billion in 1H05, setting the market up to match last year's $50 billion in LBO loans. Leveraged corporates were no slouches either, racking up nearly $30 billion in merger debt.

Rank	Bank Holding Company	Volume	# of deals	Market Share
1	J.P. Morgan	$150,476,967,084	274	33%
2	Bank of America	85,781,741,750	275	19%
3	Citigroup	74,389,320,783	116	16%
4	Wachovia Securities	23,379,890,000	94	5%
5	Credit Suisse First Boston	14,977,768,228	44	3%
6	Deutsche Bank	12,639,569,752	27	3%
7	Goldman Sachs & Co.	11,010,062,500	17	2%
8	Barclays Bank Plc	8,185,651,000	15	2%
9	Lehman Brothers	7,270,124,999	16	2%
10	Royal Bank of Scotland Plc	6,057,000,000	12	1%

 

Loan Pricing Corporation's 2Q2005 Leveraged Lead Arranger League Table

Rank	Bank Holding Company	Volume	# of deals	Market Share
1	J.P. Morgan	$26,810,156,831	100	19%
2	Bank of America	22,019,816,143	117	16%
3	Citigroup	12,938,350,531	37	9%
4	Credit Suisse First Boston	10,952,768,228	39	8%
5	Deutsche Bank	10,014,326,616	20	7%
6	Goldman Sachs & Co.	7,510,062,500	16	5%
7	Lehman Brothers	7,045,124,999	15	5%
8	Wachovia Securities	6,691,121,000	37	5%
9	Royal Bank of Scotland	3,632,000,000	2	3%
10	Bear Stearns Cos.	3,164,500,000	14	2%

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