This is the third and largest consecutive annual increase in EMEA lending since 2001, and the 2004 loan volume far outstripped the market's previous M&A-fuelled high of $586 billion in 2000.

The increase in volume was matched by a 36 percent increase in deal numbers to 1,436 transactions as companies turned to the loan market to take advantage of a sharp drop in costs. Loan prices nearly halved in 2004 as banks and institutional investors crowded into a market that held appeal by comparison with lacklustre bond and equity markets and as banks competed fiercely for mandates and income.

Record EMEA lending came largely in the fourth quarter as corporate refinancing gathered momentum. The volume rose 81 percent in the quarter to $294 billion from the fourth quarter of 2003.

For the full year, investment-grade borrowing jumped 52 percent to $673 billion, and refinancing activity rose 46 percent on 2003.

Financial services was the sector most active in borrowing and produced the largest loan of the year - a 20 billion euro ($27.2 billion) loan to CADES, the French state agency in charge of refinancing France's social security debt. Two M&A related loans took second and third place - a 16 billion euro loan to Sanofi <SASY.PA>, which backed its bid for rival Aventis, and a 12 billion euro loan to Telecom Italia <TLIT.MI> to finance its merger with mobile unit TIM. M&A lending rose 27 percent to $148 billion, and bankers are optimistic about prospects for M&A lending in 2005.

PRIVATE EQUITY LENDING SOARS
The EMEA leveraged loan market, which finances more indebted non-investment grade companies and private equity sponsors' leveraged buyouts (LBOs), turned in $120 billion of volume.

The majority of leveraged lending - 60 percent - backs private equity firms' activity both in new LBO lending and in recapitalising existing investments to take out dividend payments.

Private equity firms borrowed a total of $72 billion in 2004 -- 49 percent more than 2003 -- as their increased firepower allowed them to seek larger acquisitions and take advantage of ideal borrowing conditions.

The significant increase in LBO lending failed to meet demand, however, from a rapidly growing and highly liquid institutional investor base, which was undeterred by record
leverage levels on LBOs such as the controversial buyout of yelllow pages business VNU World Directories.

Two-thirds of private equity borrowing was for new LBO deals, such as the sale of the UK's Automobile Association, while 32 percent was for recapitalisation deals such as for German chemicals company Cognis and U.K. gambling company Coral Eurobet.

BARCLAYS TAKES TOP POSITION
Amid fierce competition for mandates and fee income, Barclays Bank emerged as the top mandated lead arranger of all syndicated EMEA bank loans, arranging 280 loans worth $68 billion, giving the bank a 7.9 percent market share.

BNP Paribas came in second with 7.5 percent of the market -- arranging 292 deals totalling $64.7 billion. Citigroup followed with 247 deals totalling $63.7 billion, or 7.37 percent of the market.

The following is Loan Pricing Corporation's EMEA mandated lead arranger tables for 2004.

Rank	Bank Holding Company	Volume (U.S.$)	Deals	Share
1	Barclays	$68.052	280	7.88%
2	BNP Paribas	$64.796	292	7.50%
3	Citigroup	$63.703	247	7.37%
4	Royal Bank of Scotland	$51.247	284	5.93%
5	HSBC	$47.583	242	5.51%
6	J.P. Morgan	$45.483	125	5.27%
7	Calyon	$44.748	186	5.18%
8	ABN AMRO	$44.601	190	5.16%
9	Deutsche Bank	$41.100	151	4.76%
10	Societe Generale	$36.442	199	4.22%

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.

Return to top

 | © 2005 Loan Pricing Corporation | Privacy Policy |