Western Europe's investment grade borrowers continued to push for lower pricing and longer loan maturities. They borrowed $151.5 billion in the second quarter, which was up nearly 4% year on year. This did not, however, compensate for a slower first quarter, and half-year investment grade volume of $236.3 billion is down nearly 3% on the same period of 2003.

"While European investment grade lending eased overall during the first half, it showed a phenomenal increase in France," says Jim Davis, President and CEO of Loan Pricing Corporation.

The €16 billion loan backing French pharmaceutical company Sanofi-Synthelabo's takeover of Aventis is the largest loan of the first half of the year. France has been particularly busy this year, having borrowed $71.8 billion in 71 deals, which is 25% up on 2003. Companies such as drinks firm Pernod Ricard and insurer AXA are continuing to chip away at terms and conditions in a borrower's market.

The leveraged loan market, which finances more indebted, non-investment grade companies and private equity sponsor activity, produced second quarter lending of $27.8 billion, bringing first half EMEA leveraged lending to $52.9 billion. This is 10% down compared to last year, thanks in part to the improving economic environment that has led to fewer emergency financings.

Although second quarter lending for new leveraged buyouts dropped 28% year on year to $6.9 billion, giving a first half figure of $15.3 billion that is nearly 18% down year on year, overall private equity sponsor activity has increased significantly. Private equity firms are using the bank market to realise some of their investments through recapitalisations and secondary and tertiary buyouts, while the equity markets remain unreceptive to exits.

Overall private equity financing of $13.8 billion is up nearly 11% on the second quarter of 2003. This has helped to push first half sponsor activity to $25.7 billion - almost 18% higher than the first half of 2003, thanks to a series of large recapitalisations for companies such as German chemicals company Cognis.

Amid fierce competition for mandates, BNP Paribas emerged as the lead arranger of bank syndicated EMEA bank loans in the first half of the year, arranging 117 deals worth $31.9 billion. Citigroup came in second with 79 deals totalling $25 billion, followed by Deutsche Bank with 58 deals totalling $21.2 billion.

Rank	Bank Holding Company	Volume (U.S.$)	Deals	Share
1	BNP Paribas	31,873,643,392	117	10%
2	Citigroup	24,971,147,836	79	8%
3	Deutsche Bank	21,198,778,475	58	7%
4	Barclays	18,948,352,578	80	6%
5	ABN AMRO.	18,032,801,135	67	6%
6	J.P. Morgan	17,173,747,409	45	5%
7	HSBC	16,237,093,546	83	5%
8	Royal Bank of Scotland	15,802,634,435	81	5%
9	DrKW	12,173,857,327	48	4%
10	Societe Generale	10,950,182,863	67	3%

About Loan Pricing Corporation
Since 1985 Loan Pricing Corporation (LPC) (www.loanpricing.com), a Reuters Company, has provided market players around the world with the most complete and accurate news, data and analytics on bank loans. LPC's coverage spans the U.S., Europe, Middle East, Africa, Latin America, and Asia-Pacific via subsidiary Basis Point Publishing Limited. LPC's content is delivered via publications, on-line services and databases.

LPC is the premier global provider of loan market information and analysis as a result of its in-depth focus on the loan industry and development of state-of-the-art products and services for bankers, borrowers and loan investors.

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