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EMEA loan market hits record $576B in 1H05
London - July 1, 2005 - Companies in Europe, the Middle East and
Africa (EMEA) borrowed $330 billion of syndicated loans in the second
quarter of 2005, pushing loan market volume to a record $576 billion at
the half year, according to Loan Pricing Corporation, a Reuters company.
This surge in lending, a 60% increase on the first six months of 2004,
builds on a record first quarter and puts syndicated loan volume on track
to beat 2004's total of $866 billion, banking sources said.
The borrowing boom is due to a surge in activity across the board as investment
grade companies refinanced existing debt and and M&A financing rose
as private equity borrowing soared.
Pricing continued to fall in the investment grade market as companies
put pressure on banks to reduce their borrowing costs.
First half blue chip borrowing rose 70% on the same period of 2004 due
to a number of large refinancings, such as Volkswagen's €12.5 billion
deal and France Telecom's €8 billion refinancing.
France Telecom was the first company to break through 15 bps over EURIBOR
barrier in late May,
with a spread of 14.5 bps, however this benchmark was quickly eclipsed
by French supermarket operator Carrefour.
Carrefour set a new pricing low on its seven-year €1.5 billion refinancing,
with an interest margin of 11.5 bps over EURIBOR in the first five years,
rising to 13.5 bps for years six and seven.
Volkswagen's €12.5 billion loan refinancing erred on the side of
caution with an interest margin of 20 bps as the deal was launched at
a difficult time for the sector in the aftermath of the downgrades of
Ford and General Motors.
The deal closed successfully, raising more than E17 billion from the market
in a further sign of banks' continued demand for assets and strong liquidity.
M&A LENDING CLIMBS
First half M&A financing of $326 billion shows a strong 70% increase
on the first six months of 2004, due to large acquistion financings for
Pernod Ricard and Metrovacesa.
Pernod Ricard financed its £7.4 billion bid for U.K. drinks company
Allied Domecq with €9.359 billion loan, which was the largest M&A
deal of the second quarter.
Spanish property company Metrovacesa financed its E5.5 billion bid for
rival Gecina with a €7.573 billion loan that proved popular in syndication
and closed 40% oversubscribed.
Private equity firms' buying spree gave second quarter sponsor borrowing
of $31 billion, which brings first half private equity borrowing to $60.74
billion. This is up a massive 86% on the first half of 2004 as firms financed
new buyouts and continued to recapitalise existing buyouts despite turmoil
in the high yield bond market.
The largest new leveraged buyout financing of the second quarter was the
€3.4 billion financing backing the buyout of Spanish travel reservation
firm Amadeus by BC Partners and Cinven.
The largest recapitalisations were the €2.6 billion deal for Italian
yellow pages business SEAT Pagine Gialle, the £1.75 billion recapitalisation
for U.K. department store Debenhams and the E1.75 billion recapitalisation
of satellite operator Eutelsat.
Private equity activity in the second half is expected to remain equally
strong, with a number of large deals currently in syndication, including
the €7.55 billion facilities for Wind, which is Europe's largest
ever LBO.
| Loan Pricing Corporation's 1H05 EMEA Mandated Lead Arranger League Table |
 |
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| Rank | Bank Holding Company | Volume | # of deals | Market Share |
|
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| 1 | BNPParibas | 46,434,888,566 | 179 | 8.10% |
| 2 | Citigroup | 45,399,367,884 | 142 | 7.89% |
| 3 | RoyalBankofScotland | 42,168,826,302 | 157 | 7.33% |
| 4 | Barclays | 39,597,860,629 | 150 | 6.88% |
| 5 | HSBC | 31,407,992,920 | 131 | 5.46% |
| 6 | SocieteGenerale | 31,366,965,488 | 105 | 5.45% |
| 7 | J.P.Morgan | 31,239,444,215 | 72 | 5.43% |
| 8 | DeutscheBank | 28,307,346,931 | 72 | 4.92% |
| 9 | Calyon | 26,825,907,841 | 120 | 4.66% |
| 10 | ABNAMRO | 21,758,285,575 | 86 | 3.78% |
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 the loan and credit markets.
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 credit market information and analysis
as a result of its in-depth focus on the credit industry and development
of state-of-the-art products and services for bankers, borrowers and investors.